Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Adobe Inc. (NASDAQ:ADBE)

Return on Capital (ROC)

Advanced level

Return on Invested Capital (ROIC)

Adobe Inc., ROIC calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
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

Microsoft Excel LibreOffice Calc
ROIC = OPM1 × TO2 × 1 – CTR3
Nov 27, 2020 21.67% = 34.42% × 0.70 × 90.37%
Nov 29, 2019 19.74% = 31.93% × 0.67 × 92.94%
Nov 30, 2018 17.25% = 35.32% × 0.61 × 80.03%
Dec 1, 2017 22.06% = 33.91% × 0.77 × 84.85%
Dec 2, 2016 21.03% = 31.32% × 0.77 × 87.15%
Nov 27, 2015 11.74% = 24.23% × 0.66 × 73.94%

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

Microsoft Excel LibreOffice Calc
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

Microsoft Excel LibreOffice Calc
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

Microsoft Excel LibreOffice Calc
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.