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’s debt and equity structure. It measures business productivity performance.
Return on Invested Capital (ROIC)
Adobe Inc., ROIC calculation, comparison to benchmarks
| Nov 27, 2020 | Nov 29, 2019 | Nov 30, 2018 | Dec 1, 2017 | Dec 2, 2016 | Nov 27, 2015 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | 4,082 | 3,448 | 2,711 | 2,239 | 1,742 | 918 | |
| Invested capital2 | 18,837 | 17,466 | 15,711 | 10,148 | 8,285 | 7,822 | |
| Performance Ratio | |||||||
| ROIC3 | 21.67% | 19.74% | 17.25% | 22.06% | 21.03% | 11.74% | |
| Benchmarks | |||||||
| ROIC, Competitors4 | |||||||
| Alphabet Inc. | — | 32.75% | 34.31% | 19.71% | 26.91% | 22.22% | |
| Autodesk Inc. | 21.62% | 0.93% | -11.17% | -9.45% | 8.45% | 10.16% | |
| Facebook Inc. | — | 27.51% | 36.42% | 37.03% | 25.08% | 9.26% | |
| International Business Machines Corp. | — | 7.84% | 8.46% | 5.77% | 10.53% | 13.69% | |
| Intuit Inc. | 20.58% | 34.72% | 32.34% | 36.84% | 34.96% | 28.34% | |
| Microsoft Corp. | 48.91% | 42.06% | 21.26% | 35.75% | 53.10% | 29.69% | |
| Oracle Corp. | 11.53% | 15.18% | 5.88% | 13.04% | 15.80% | 14.73% | |
| salesforce.com inc. | 4.97% | 8.95% | 9.47% | 7.75% | 9.27% | 6.61% | |
| ServiceNow Inc. | — | 19.88% | 15.78% | 15.89% | -10.81% | 0.75% | |
Based on: 10-K (filing date: 2021-01-15), 10-K (filing date: 2020-01-21), 10-K (filing date: 2019-01-25), 10-K (filing date: 2018-01-22), 10-K (filing date: 2017-01-20), 10-K (filing date: 2016-01-19).
1 NOPAT. See details »
2 Invested capital. See details »
3 2020 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 4,082 ÷ 18,837 = 21.67%
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. | Adobe Inc.’s ROIC improved from 2018 to 2019 and from 2019 to 2020. |
Decomposition of ROIC
Adobe Inc., decomposition of ROIC
Based on: 10-K (filing date: 2021-01-15), 10-K (filing date: 2020-01-21), 10-K (filing date: 2019-01-25), 10-K (filing date: 2018-01-22), 10-K (filing date: 2017-01-20), 10-K (filing date: 2016-01-19).
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 increase in return on invested capital (ROIC) over 2020 year is the increase in profitability measured by operating profit margin (OPM) ratio.
Operating Profit Margin (OPM)
Adobe Inc., OPM calculation, comparison to benchmarks
| Nov 27, 2020 | Nov 29, 2019 | Nov 30, 2018 | Dec 1, 2017 | Dec 2, 2016 | Nov 27, 2015 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | 4,082 | 3,448 | 2,711 | 2,239 | 1,742 | 918 | |
| Add: Cash operating taxes2 | 435 | 262 | 676 | 400 | 257 | 324 | |
| Net operating profit before taxes (NOPBT) | 4,518 | 3,709 | 3,387 | 2,639 | 1,999 | 1,242 | |
| Revenue | 12,868 | 11,171 | 9,030 | 7,302 | 5,854 | 4,796 | |
| Add: Increase (decrease) in deferred revenue | 258 | 447 | 559 | 480 | 529 | 330 | |
| Adjusted revenue | 13,126 | 11,618 | 9,589 | 7,781 | 6,384 | 5,125 | |
| Profitability Ratio | |||||||
| OPM3 | 34.42% | 31.93% | 35.32% | 33.91% | 31.32% | 24.23% | |
| Benchmarks | |||||||
| OPM, Competitors4 | |||||||
| Alphabet Inc. | — | 23.20% | 23.81% | 24.25% | 26.49% | 25.64% | |
| Autodesk Inc. | 30.50% | 3.88% | -13.37% | -9.48% | 13.40% | 12.87% | |
| Facebook Inc. | — | 34.36% | 44.37% | 49.93% | 44.85% | 34.99% | |
| International Business Machines Corp. | — | 16.43% | 14.56% | 16.13% | 16.19% | 19.65% | |
| Intuit Inc. | 29.33% | 28.32% | 25.71% | 28.07% | 29.36% | 24.51% | |
| Microsoft Corp. | 38.29% | 36.61% | 35.11% | 31.99% | 30.09% | 19.34% | |
| Oracle Corp. | 34.29% | 34.21% | 35.42% | 34.66% | 35.32% | 35.82% | |
| salesforce.com inc. | 15.13% | 18.93% | 16.11% | 15.00% | 15.40% | 11.86% | |
| ServiceNow Inc. | — | 14.97% | 14.28% | 13.97% | -7.00% | 2.38% | |
Based on: 10-K (filing date: 2021-01-15), 10-K (filing date: 2020-01-21), 10-K (filing date: 2019-01-25), 10-K (filing date: 2018-01-22), 10-K (filing date: 2017-01-20), 10-K (filing date: 2016-01-19).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2020 Calculation
OPM = 100 × NOPBT ÷ Adjusted revenue
= 100 × 4,518 ÷ 13,126 = 34.42%
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. | Adobe Inc.’s OPM deteriorated from 2018 to 2019 but then improved from 2019 to 2020 not reaching 2018 level. |
Turnover of Capital (TO)
Adobe Inc., TO calculation, comparison to benchmarks
| Nov 27, 2020 | Nov 29, 2019 | Nov 30, 2018 | Dec 1, 2017 | Dec 2, 2016 | Nov 27, 2015 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Revenue | 12,868 | 11,171 | 9,030 | 7,302 | 5,854 | 4,796 | |
| Add: Increase (decrease) in deferred revenue | 258 | 447 | 559 | 480 | 529 | 330 | |
| Adjusted revenue | 13,126 | 11,618 | 9,589 | 7,781 | 6,384 | 5,125 | |
| Invested capital1 | 18,837 | 17,466 | 15,711 | 10,148 | 8,285 | 7,822 | |
| Efficiency Ratio | |||||||
| TO2 | 0.70 | 0.67 | 0.61 | 0.77 | 0.77 | 0.66 | |
| Benchmarks | |||||||
| TO, Competitors3 | |||||||
| Alphabet Inc. | — | 1.61 | 1.58 | 1.69 | 1.25 | 1.05 | |
| Autodesk Inc. | 0.76 | 0.61 | 0.69 | 0.67 | 0.79 | 0.83 | |
| Facebook Inc. | — | 1.08 | 0.93 | 0.98 | 0.71 | 0.57 | |
| International Business Machines Corp. | — | 0.59 | 0.71 | 0.73 | 0.75 | 0.81 | |
| Intuit Inc. | 0.89 | 1.50 | 1.50 | 1.80 | 1.77 | 1.58 | |
| Microsoft Corp. | 1.52 | 1.49 | 1.52 | 1.31 | 1.94 | 2.27 | |
| Oracle Corp. | 0.44 | 0.55 | 0.55 | 0.49 | 0.58 | 0.57 | |
| salesforce.com inc. | 0.41 | 0.51 | 0.63 | 0.57 | 0.70 | 0.65 | |
| ServiceNow Inc. | — | 1.36 | 1.18 | 1.24 | 1.33 | 1.14 | |
Based on: 10-K (filing date: 2021-01-15), 10-K (filing date: 2020-01-21), 10-K (filing date: 2019-01-25), 10-K (filing date: 2018-01-22), 10-K (filing date: 2017-01-20), 10-K (filing date: 2016-01-19).
1 Invested capital. See details »
2 2020 Calculation
TO = Adjusted revenue ÷ Invested capital
= 13,126 ÷ 18,837 = 0.70
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. | Adobe Inc.’s TO improved from 2018 to 2019 and from 2019 to 2020. |
Effective Cash Tax Rate (CTR)
Adobe Inc., CTR calculation, comparison to benchmarks
| Nov 27, 2020 | Nov 29, 2019 | Nov 30, 2018 | Dec 1, 2017 | Dec 2, 2016 | Nov 27, 2015 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | 4,082 | 3,448 | 2,711 | 2,239 | 1,742 | 918 | |
| Add: Cash operating taxes2 | 435 | 262 | 676 | 400 | 257 | 324 | |
| Net operating profit before taxes (NOPBT) | 4,518 | 3,709 | 3,387 | 2,639 | 1,999 | 1,242 | |
| Tax Rate | |||||||
| CTR3 | 9.63% | 7.06% | 19.97% | 15.15% | 12.85% | 26.06% | |
| Benchmarks | |||||||
| CTR, Competitors4 | |||||||
| Alphabet Inc. | — | 12.46% | 8.68% | 52.04% | 18.98% | 17.49% | |
| Autodesk Inc. | 6.38% | 60.79% | — | — | 20.47% | 5.36% | |
| Facebook Inc. | — | 25.67% | 11.36% | 24.12% | 21.75% | 53.24% | |
| International Business Machines Corp. | — | 18.55% | 18.30% | 51.29% | 13.24% | 13.55% | |
| Intuit Inc. | 21.07% | 18.38% | 16.40% | 27.07% | 32.70% | 26.75% | |
| Microsoft Corp. | 15.80% | 22.65% | 60.11% | 14.62% | 9.05% | 32.49% | |
| Oracle Corp. | 23.42% | 19.20% | 70.01% | 22.82% | 22.47% | 27.32% | |
| salesforce.com inc. | 19.76% | 7.48% | 7.21% | 9.36% | 13.59% | 14.02% | |
| ServiceNow Inc. | — | 2.51% | 6.49% | 8.20% | — | 72.30% | |
Based on: 10-K (filing date: 2021-01-15), 10-K (filing date: 2020-01-21), 10-K (filing date: 2019-01-25), 10-K (filing date: 2018-01-22), 10-K (filing date: 2017-01-20), 10-K (filing date: 2016-01-19).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2020 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 435 ÷ 4,518 = 9.63%
4 Click competitor name to see calculations.
| Tax rate | Description | The company |
|---|---|---|
| CTR | Effective cash tax rate on operating income. | Adobe Inc.’s CTR decreased from 2018 to 2019 but then slightly increased from 2019 to 2020. |