Return on Capital (ROC)
Return on capital (ROC) is after tax rate of return on net business assets. ROIC is unaffected by changes in interest rates or company debt and equity structure. It measures business productivity performance.
Return on Invested Capital (ROIC)
Johnson & Johnson, ROIC calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 29, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | 8,905) | 16,089) | 18,854) | 13,700) | 12,552) | |
| Invested capital2 | 99,118) | 113,927) | 98,203) | 98,488) | 96,969) | |
| Performance Ratio | ||||||
| ROIC3 | 8.98% | 14.12% | 19.20% | 13.91% | 12.94% | |
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| AbbVie Inc. | 4.83% | 14.05% | 12.89% | 4.30% | 14.74% | |
| Amgen Inc. | 11.15% | 16.11% | 15.93% | 20.35% | 22.74% | |
| Bristol-Myers Squibb Co. | 8.69% | 6.37% | 8.29% | -7.57% | 3.06% | |
| Eli Lilly & Co. | 10.52% | 17.77% | 19.28% | 25.89% | 22.93% | |
| Gilead Sciences Inc. | 11.75% | 8.28% | 14.43% | 1.26% | 12.92% | |
| Merck & Co. Inc. | -1.02% | 19.14% | 18.87% | 11.66% | 18.52% | |
| Pfizer Inc. | -0.82% | 28.01% | 20.98% | 5.87% | 14.19% | |
| Regeneron Pharmaceuticals Inc. | 26.80% | 29.90% | 72.83% | 44.66% | 34.05% | |
| Thermo Fisher Scientific Inc. | 5.98% | 7.76% | 9.32% | 10.70% | 6.69% | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29).
1 NOPAT. See details »
2 Invested capital. See details »
3 2023 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 8,905 ÷ 99,118 = 8.98%
4 Click competitor name to see calculations.
| Performance ratio | Description | The company |
|---|---|---|
| ROIC | A measure of the periodic, after tax, cash-on-cash yield earned in the business. | Johnson & Johnson ROIC deteriorated from 2021 to 2022 and from 2022 to 2023. |
Decomposition of ROIC
Johnson & Johnson, decomposition of ROIC
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29).
1 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
The primary reason for the decrease in return on invested capital (ROIC) over 2023 year is the decrease in profitability measured by operating profit margin (OPM) ratio.
Operating Profit Margin (OPM)
Johnson & Johnson, OPM calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 29, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | 8,905) | 16,089) | 18,854) | 13,700) | 12,552) | |
| Add: Cash operating taxes2 | 5,700) | 5,411) | 4,010) | 2,949) | 4,683) | |
| Net operating profit before taxes (NOPBT) | 14,605) | 21,500) | 22,864) | 16,649) | 17,235) | |
| Sales to customers | 85,159) | 94,943) | 93,775) | 82,584) | 82,059) | |
| Profitability Ratio | ||||||
| OPM3 | 17.15% | 22.65% | 24.38% | 20.16% | 21.00% | |
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| AbbVie Inc. | 14.58% | 26.77% | 27.06% | 13.19% | 30.02% | |
| Amgen Inc. | 40.00% | 35.35% | 32.55% | 38.71% | 46.69% | |
| Bristol-Myers Squibb Co. | 21.81% | 19.38% | 20.31% | -12.65% | 21.63% | |
| Eli Lilly & Co. | 20.00% | 24.98% | 22.91% | 30.98% | 24.91% | |
| Gilead Sciences Inc. | 29.07% | 25.11% | 34.43% | 10.83% | 27.94% | |
| Merck & Co. Inc. | 4.63% | 30.22% | 30.60% | 19.13% | 26.21% | |
| Pfizer Inc. | 1.43% | 38.86% | 30.18% | 19.53% | 35.42% | |
| Regeneron Pharmaceuticals Inc. | 32.80% | 40.59% | 58.09% | 46.15% | 33.80% | |
| Thermo Fisher Scientific Inc. | 15.91% | 18.33% | 23.79% | 24.12% | 17.61% | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2023 Calculation
OPM = 100 × NOPBT ÷ Sales to customers
= 100 × 14,605 ÷ 85,159 = 17.15%
4 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| OPM | The operating profit margin (OPM) is the ratio of pretax economic earnings, or NOPBT, to sales. | Johnson & Johnson OPM deteriorated from 2021 to 2022 and from 2022 to 2023. |
Turnover of Capital (TO)
Johnson & Johnson, TO calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 29, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales to customers | 85,159) | 94,943) | 93,775) | 82,584) | 82,059) | |
| Invested capital1 | 99,118) | 113,927) | 98,203) | 98,488) | 96,969) | |
| Efficiency Ratio | ||||||
| TO2 | 0.86 | 0.83 | 0.95 | 0.84 | 0.85 | |
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| AbbVie Inc. | 0.80 | 0.71 | 0.59 | 0.44 | 0.53 | |
| Amgen Inc. | 0.38 | 0.62 | 0.60 | 0.63 | 0.59 | |
| Bristol-Myers Squibb Co. | 0.67 | 0.64 | 0.58 | 0.47 | 0.26 | |
| Eli Lilly & Co. | 1.16 | 1.17 | 1.08 | 1.00 | 1.04 | |
| Gilead Sciences Inc. | 0.59 | 0.59 | 0.57 | 0.48 | 0.70 | |
| Merck & Co. Inc. | 0.86 | 0.80 | 0.69 | 0.84 | 0.87 | |
| Pfizer Inc. | 0.38 | 0.91 | 0.93 | 0.40 | 0.43 | |
| Regeneron Pharmaceuticals Inc. | 1.10 | 0.99 | 1.48 | 1.03 | 1.20 | |
| Thermo Fisher Scientific Inc. | 0.50 | 0.54 | 0.49 | 0.53 | 0.49 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29).
1 Invested capital. See details »
2 2023 Calculation
TO = Sales to customers ÷ Invested capital
= 85,159 ÷ 99,118 = 0.86
3 Click competitor name to see calculations.
| Efficiency ratio | Description | The company |
|---|---|---|
| TO | The turnover of capital (TO) is the ratio of sales to invested capital. Capital turnover is a function of the efficiency of working capital management and of net fixed assets. | Johnson & Johnson TO deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
Effective Cash Tax Rate (CTR)
Johnson & Johnson, CTR calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 29, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | 8,905) | 16,089) | 18,854) | 13,700) | 12,552) | |
| Add: Cash operating taxes2 | 5,700) | 5,411) | 4,010) | 2,949) | 4,683) | |
| Net operating profit before taxes (NOPBT) | 14,605) | 21,500) | 22,864) | 16,649) | 17,235) | |
| Tax Rate | ||||||
| CTR3 | 39.03% | 25.17% | 17.54% | 17.72% | 27.17% | |
| Benchmarks | ||||||
| CTR, Competitors4 | ||||||
| AbbVie Inc. | 58.42% | 25.72% | 18.70% | 26.24% | 7.42% | |
| Amgen Inc. | 27.52% | 27.01% | 18.93% | 15.91% | 17.97% | |
| Bristol-Myers Squibb Co. | 40.21% | 48.91% | 29.34% | — | 45.70% | |
| Eli Lilly & Co. | 54.68% | 39.42% | 22.30% | 16.37% | 11.34% | |
| Gilead Sciences Inc. | 31.23% | 44.33% | 25.84% | 76.01% | 34.29% | |
| Merck & Co. Inc. | 125.66% | 20.99% | 10.42% | 27.35% | 19.04% | |
| Pfizer Inc. | 252.75% | 20.44% | 25.02% | 25.53% | 6.34% | |
| Regeneron Pharmaceuticals Inc. | 25.49% | 25.84% | 15.22% | 5.72% | 16.36% | |
| Thermo Fisher Scientific Inc. | 24.94% | 21.94% | 19.99% | 15.79% | 21.66% | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2023 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 5,700 ÷ 14,605 = 39.03%
4 Click competitor name to see calculations.
| Tax rate | Description | The company |
|---|---|---|
| CTR | Effective cash tax rate on operating income. | Johnson & Johnson CTR increased from 2021 to 2022 and from 2022 to 2023. |