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 29, 2019 Nov 30, 2018 Dec 1, 2017 Dec 2, 2016 Nov 27, 2015 Nov 28, 2014
Selected Financial Data (US$ in thousands)
Net operating profit after taxes (NOPAT)1 3,447,569  2,710,671  2,238,829  1,742,264  918,162  575,952 
Invested capital2 17,465,701  15,710,618  10,147,610  8,285,353  7,821,777  7,203,913 
Performance Ratio
ROIC3 19.74% 17.25% 22.06% 21.03% 11.74% 7.99%
Benchmarks
ROIC, Competitors4
Alphabet Inc. 32.75% 34.31% 19.71% 26.91% 22.22%
Autodesk Inc. 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. 34.72% 32.34% 36.84% 34.96% 28.34%
Microsoft Corp. 42.06% 21.26% 35.75% 53.10% 29.69%
Oracle Corp. 15.18% 5.88% 13.04% 15.80% 14.73%
salesforce.com inc. 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: 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), 10-K (filing date: 2015-01-20).

1 NOPAT. See details »

2 Invested capital. See details »

3 2019 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 3,447,569 ÷ 17,465,701 = 19.74%

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 deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.

Decomposition of ROIC

Adobe Inc., decomposition of ROIC

Microsoft Excel LibreOffice Calc
ROIC = OPM1 × TO2 × 1 – CTR3
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%
Nov 28, 2014 7.99% = 16.25% × 0.62 × 79.24%

Based on: 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), 10-K (filing date: 2015-01-20).

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 2019 year is the decrease in effective cash tax rate (CTR).


Operating Profit Margin (OPM)

Adobe Inc., OPM calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Nov 29, 2019 Nov 30, 2018 Dec 1, 2017 Dec 2, 2016 Nov 27, 2015 Nov 28, 2014
Selected Financial Data (US$ in thousands)
Net operating profit after taxes (NOPAT)1 3,447,569  2,710,671  2,238,829  1,742,264  918,162  575,952 
Add: Cash operating taxes2 261,836  676,497  399,697  256,972  323,638  150,909 
Net operating profit before taxes (NOPBT) 3,709,405  3,387,168  2,638,526  1,999,236  1,241,801  726,861 
 
Revenue 11,171,297  9,030,008  7,301,505  5,854,430  4,795,511  4,147,065 
Add: Increase (decrease) in deferred revenue 447,109  559,062  479,792  529,456  329,970  326,512 
Adjusted revenue 11,618,406  9,589,070  7,781,297  6,383,886  5,125,481  4,473,577 
Profitability Ratio
OPM3 31.93% 35.32% 33.91% 31.32% 24.23% 16.25%
Benchmarks
OPM, Competitors4
Alphabet Inc. 23.20% 23.81% 24.25% 26.49% 25.64%
Autodesk Inc. 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. 28.32% 25.71% 28.07% 29.36% 24.51%
Microsoft Corp. 36.61% 35.11% 31.99% 30.09% 19.34%
Oracle Corp. 34.21% 35.42% 34.66% 35.32% 35.82%
salesforce.com inc. 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: 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), 10-K (filing date: 2015-01-20).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2019 Calculation
OPM = 100 × NOPBT ÷ Adjusted revenue
= 100 × 3,709,405 ÷ 11,618,406 = 31.93%

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 improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Turnover of Capital (TO)

Adobe Inc., TO calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Nov 29, 2019 Nov 30, 2018 Dec 1, 2017 Dec 2, 2016 Nov 27, 2015 Nov 28, 2014
Selected Financial Data (US$ in thousands)
Revenue 11,171,297  9,030,008  7,301,505  5,854,430  4,795,511  4,147,065 
Add: Increase (decrease) in deferred revenue 447,109  559,062  479,792  529,456  329,970  326,512 
Adjusted revenue 11,618,406  9,589,070  7,781,297  6,383,886  5,125,481  4,473,577 
 
Invested capital1 17,465,701  15,710,618  10,147,610  8,285,353  7,821,777  7,203,913 
Efficiency Ratio
TO2 0.67 0.61 0.77 0.77 0.66 0.62
Benchmarks
TO, Competitors3
Alphabet Inc. 1.61 1.58 1.69 1.25 1.05
Autodesk Inc. 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. 1.50 1.50 1.80 1.77 1.58
Microsoft Corp. 1.49 1.52 1.31 1.94 2.27
Oracle Corp. 0.55 0.55 0.49 0.58 0.57
salesforce.com inc. 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: 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), 10-K (filing date: 2015-01-20).

1 Invested capital. See details »

2 2019 Calculation
TO = Adjusted revenue ÷ Invested capital
= 11,618,406 ÷ 17,465,701 = 0.67

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 deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.

Effective Cash Tax Rate (CTR)

Adobe Inc., CTR calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Nov 29, 2019 Nov 30, 2018 Dec 1, 2017 Dec 2, 2016 Nov 27, 2015 Nov 28, 2014
Selected Financial Data (US$ in thousands)
Net operating profit after taxes (NOPAT)1 3,447,569  2,710,671  2,238,829  1,742,264  918,162  575,952 
Add: Cash operating taxes2 261,836  676,497  399,697  256,972  323,638  150,909 
Net operating profit before taxes (NOPBT) 3,709,405  3,387,168  2,638,526  1,999,236  1,241,801  726,861 
Tax Rate
CTR3 7.06% 19.97% 15.15% 12.85% 26.06% 20.76%
Benchmarks
CTR, Competitors4
Alphabet Inc. 12.46% 8.68% 52.04% 18.98% 17.49%
Autodesk Inc. 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. 18.38% 16.40% 27.07% 32.70% 26.75%
Microsoft Corp. 22.65% 60.11% 14.62% 9.05% 32.49%
Oracle Corp. 19.20% 70.01% 22.82% 22.47% 27.32%
salesforce.com inc. 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: 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), 10-K (filing date: 2015-01-20).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2019 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 261,836 ÷ 3,709,405 = 7.06%

4 Click competitor name to see calculations.

Tax rate Description The company
CTR Effective cash tax rate on operating income. Adobe Inc.’s CTR increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.