Analog Devices Inc (ADI)
Solvency ratios
| Oct 28, 2023 | Oct 29, 2022 | Oct 30, 2021 | Oct 31, 2020 | Nov 2, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.12 | 0.13 | 0.12 | 0.24 | 0.24 |
| Debt-to-capital ratio | 0.14 | 0.15 | 0.14 | 0.30 | 0.31 |
| Debt-to-equity ratio | 0.17 | 0.18 | 0.16 | 0.43 | 0.44 |
| Financial leverage ratio | 1.37 | 1.38 | 1.38 | 1.79 | 1.83 |
The solvency ratios of Analog Devices Inc. show a favorable trend over the past five years, indicating improved financial strength and lower dependence on debt. The debt-to-assets ratio has decreased steadily from 0.26 in 2019 to 0.14 in 2023, signaling a reduction in the proportion of assets financed by debt. Similarly, the debt-to-capital and debt-to-equity ratios have also declined, indicating a lower reliance on debt for financing company operations.
The financial leverage ratio, which measures the extent to which a company is using debt financing, has also shown a declining trend, decreasing from 1.83 in 2019 to 1.37 in 2023. This suggests that Analog Devices has been able to lower its financial risk by reducing its reliance on debt financing.
Overall, the solvency ratios of Analog Devices Inc. indicate a positive trend, reflecting a stronger financial position and reduced exposure to financial risk over the years. This trend suggests the company's ability to effectively manage its finances and maintain a healthy balance between debt and equity financing.
Coverage ratios
| Oct 28, 2023 | Oct 29, 2022 | Oct 30, 2021 | Oct 31, 2020 | Nov 2, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 14.63 | 16.46 | 8.19 | 7.79 | 7.49 |
The interest coverage ratio measures a company's ability to meet its interest payment obligations. It is calculated by dividing the earnings before interest and taxes (EBIT) by the interest expense.
Based on the data provided, Analog Devices Inc.'s interest coverage has shown a fluctuating trend over the past five years. In the most recent fiscal year ending October 28, 2023, the interest coverage ratio stood at 17.84, indicating a substantial increase from the previous year's 18.36. This signifies that the company's EBIT was 17.84 times its interest expense, demonstrating a strong capacity to cover interest payments.
Looking back, the interest coverage ratio has generally improved over the past three years, with notable increases from 8.20 to 9.68 and then to 18.36. However, it is important to note that in fiscal year 2020, there was a slightly lower interest coverage ratio of 8.20, which may warrant further investigation.
Overall, the upward trend in the interest coverage ratio reflects enhanced financial stability and an increased capacity to handle interest obligations, indicating a positive performance in this aspect for Analog Devices Inc.