Analog Devices (Analog Devices) Operating Income

Analog Devices Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Jan. 2024 adds up the quarterly data reported by the company within the most recent 12 months, which was $3,455 Mil.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Analog Devices  (NAS:ADI) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

Analog Devices's annualized ROC % for the quarter that ended in Jan. 2024 is calculated as:

where

Note: The Operating Income data used here is four times the quarterly (Jan. 2024) data.

2. Joel Greenblatt's definition of Return on Capital:

Analog Devices's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jan. 2024 is calculated as:

where Working Capital is:

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Jan. 2024) EBIT data.

3. Operating Income is also linked to Operating Margin %:

Analog Devices's Operating Margin % for the quarter that ended in Jan. 2024 is calculated as:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.

Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

Analog Devices Operating Income Related Terms

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Analog Devices (Analog Devices) Business Description