Analog Devices Inc (ADI)

Return on assets (ROA)

		Oct 28, 2023	Oct 29, 2022	Oct 30, 2021	Oct 31, 2020	Nov 2, 2019
Net income	US$ in thousands	3,314,580	2,748,560	1,390,420	1,220,760	1,363,010
Total assets	US$ in thousands	48,794,500	50,302,400	52,322,100	21,468,600	21,392,600
ROA		6.79%	5.46%	2.66%	5.69%	6.37%

October 28, 2023 calculation

ROA = Net income ÷ Total assets
= $3,314,580K ÷ $48,794,500K
= 6.79%

Analog Devices Inc.'s return on assets (ROA) is a key financial metric that provides insights into the company's ability to generate profits from its assets. ROA is calculated by dividing net income by average total assets and is expressed as a percentage, representing the efficiency of asset utilization in generating profits.

Looking at the ROA trend over the past five years, we can observe fluctuations in the company's performance:

- In 2023, the ROA improved to 6.79% from 5.46% in 2022, indicating a more efficient use of assets to generate profits. This improvement can signal enhanced operational efficiency or increased profitability relative to its asset base.

- In 2022, there was a slight decline in ROA to 5.46% from 2.66% in 2021. Although the ROA remained relatively high, this downward trend suggests a temporary decrease in the company's ability to generate profits from its assets compared to the previous year.

- The sharp increase in ROA from 2.66% in 2021 to 5.69% in 2020 signifies a significant improvement in the company's profitability relative to its asset base. This improvement could be due to effective cost management, increased sales, or better asset utilization.

- In 2019, the ROA was 6.36%, indicating a high level of profitability relative to the company's asset base. This suggests that Analog Devices Inc. has historically been efficient in generating profits from its assets.

Overall, it is essential to further investigate the factors contributing to the fluctuations in ROA over the years. Potential areas for analysis could include changes in cost structure, revenue drivers, asset turnover, or the impact of acquisitions or divestitures on the asset base. These fluctuations may also be influenced by macroeconomic factors, industry-specific dynamics, or company-specific initiatives. Additional contextual information would be necessary to fully interpret the implications of these ROA fluctuations for Analog Devices Inc.