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.
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Airbnb Inc. pages available for free this week:
- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Capital Asset Pricing Model (CAPM)
- Selected Financial Data since 2020
- Price to Earnings (P/E) since 2020
- Price to Operating Profit (P/OP) since 2020
- Price to Book Value (P/BV) since 2020
- Analysis of Debt
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Return on Invested Capital (ROIC)
Airbnb Inc., ROIC calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| ROIC3 | ||||||
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 NOPAT. See details »
2 Invested capital. See details »
3 2024 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Net Operating Profit After Taxes (NOPAT)
- There is a significant improvement in NOPAT over the analyzed period. The company transitioned from a substantial loss of -4675 million US dollars as of December 31, 2020, to positive profitability in subsequent years. By December 31, 2021, NOPAT rose sharply to 465 million US dollars and continued to increase to 2070 million by the end of 2022. A slight decline occurred in 2023, with NOPAT at 1681 million, followed by a recovery to 2644 million US dollars in 2024. This pattern suggests enhanced operational efficiency and profitability over time, with minor fluctuations.
- Invested Capital
- Invested capital shows a general upwards trend from 4764 million US dollars in 2020 to a peak of 6849 million in 2022. However, a reduction is noted in 2023, bringing the invested capital down to 5829 million, before a modest increase to 6117 million in 2024. This indicates that the company increased investments significantly until 2022, followed by a contraction and a slight rebound in the following years. The shifts may reflect strategic capital allocation or adjustments in asset base.
- Return on Invested Capital (ROIC)
- ROIC demonstrates a marked improvement across the period. Starting from a deeply negative figure of -98.14% in 2020, it turns positive in 2021 at 7.96%, then rises sharply to 30.22% in 2022. There is a minor decline to 28.83% in 2023, and subsequently a notable increase to 43.22% in 2024. The overall trend highlights increasing effectiveness in generating returns from invested capital, with strong recovery following the initial loss and consistent improvement thereafter.
- Summary
- The financial data reflects a company that has moved from significant operating losses to consistent profitability over five years. The initial recovery phase saw considerable improvement in net operating profit and ROIC, alongside an expanding invested capital base. The slight reductions in 2023 across NOPAT, invested capital, and ROIC suggest a temporary adjustment period, before a robust performance in 2024 with the highest ROIC and NOPAT levels recorded during the period. This indicates strengthening operational efficiency and capital productivity in the latter years.
Decomposition of ROIC
Airbnb Inc., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2024 | = | × | × | ||||
| Dec 31, 2023 | = | × | × | ||||
| Dec 31, 2022 | = | × | × | ||||
| Dec 31, 2021 | = | × | × | ||||
| Dec 31, 2020 | = | × | × |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
- Operating Profit Margin (OPM)
- The operating profit margin exhibited a significant improvement over the analyzed period. Starting at a deeply negative margin of -151.42% in 2020, it turned positive in 2021 with 9.31%, followed by continued growth to 24.64% in 2022. Although there was a slight decline to 17.09% in 2023, the margin rebounded to 24.19% by 2024. This indicates a strong recovery and overall enhancement in operational profitability across the years.
- Turnover of Capital (TO)
- The turnover of capital showed a consistent upward trend during the period. Initially low at 0.65 in 2020, it increased steadily each year, reaching 1.11 in 2021, 1.27 in 2022, then accelerating to 1.74 in 2023 and 1.85 in 2024. This reflects more efficient utilization of capital assets, suggesting improvements in asset management and revenue generation capacity.
- 1 – Effective Cash Tax Rate (CTR)
- The effective cash tax rate, expressed as '1 – CTR', remained relatively stable at a high level. It started at 100% in 2020, then decreased to approximately 77% in 2021, before rising again to about 97% in the subsequent years through 2024. This implies the company maintained a high proportion of earnings after cash taxes, though with a notable dip in 2021 potentially related to tax strategy or temporary factors.
- Return on Invested Capital (ROIC)
- The return on invested capital improved markedly over the analyzed years. From a substantially negative return of -98.14% in 2020, it shifted to a positive 7.96% in 2021. This improvement accelerated in 2022 with a 30.22% return, a modest decline to 28.83% in 2023, and a strong rise to 43.22% in 2024. These figures indicate the company has become increasingly effective at generating returns from its invested capital, signaling enhanced operational efficiency and value creation.
Operating Profit Margin (OPM)
Airbnb Inc., OPM calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in unearned fees | ||||||
| Adjusted revenue | ||||||
| Profitability Ratio | ||||||
| OPM3 | ||||||
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2024 Calculation
OPM = 100 × NOPBT ÷ Adjusted revenue
= 100 × ÷ =
4 Click competitor name to see calculations.
- Net Operating Profit Before Taxes (NOPBT)
- The NOPBT experienced a significant turnaround from 2020 to 2021, moving from a substantial loss of -4711 million US dollars to a positive 604 million US dollars. This positive trend continued in the subsequent years, rising to 2138 million in 2022, followed by a slight decline to 1737 million in 2023, before increasing again to 2732 million in 2024. Overall, the company demonstrated recovery and growth in pre-tax profitability over the five-year period.
- Adjusted Revenue
- Adjusted revenue showed consistent and strong growth across the analyzed periods. Starting at 3111 million US dollars in 2020, revenue more than doubled to 6488 million in 2021 and continued to increase to 8677 million in 2022. The upward trajectory persisted with revenues reaching 10162 million in 2023 and further growing to 11291 million by 2024. This steady increase indicates an expanding business scale and potentially successful market strategies or higher demand.
- Operating Profit Margin (OPM)
- The operating profit margin saw a dramatic improvement from a deeply negative -151.42% in 2020, indicating severe operational losses. In 2021, the margin turned positive to 9.31%, followed by a strong increase to 24.64% in 2022. There was a decline to 17.09% in 2023, suggesting some operational challenges or increased costs, but the margin recovered to 24.19% in 2024. This pattern reveals overall enhanced operational efficiency and profitability, despite a temporary setback in the middle of the period.
Turnover of Capital (TO)
Airbnb Inc., TO calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in unearned fees | ||||||
| Adjusted revenue | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 Invested capital. See details »
2 2024 Calculation
TO = Adjusted revenue ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
- Adjusted Revenue
- The adjusted revenue displayed a consistent upward trajectory over the five-year period. Starting from 3,111 million US dollars in 2020, it more than doubled in 2021 to 6,488 million US dollars. Growth continued at a slightly decelerated pace, reaching 8,677 million US dollars in 2022, 10,162 million US dollars in 2023, and finally 11,291 million US dollars in 2024. This trend indicates strong and sustained revenue growth each year.
- Invested Capital
- The invested capital showed a generally increasing trend with a minor fluctuation. Beginning at 4,764 million US dollars in 2020, it increased to 5,836 million in 2021 and further to 6,849 million in 2022. However, in 2023, invested capital declined to 5,829 million US dollars before rising slightly again to 6,117 million US dollars in 2024. Despite this dip in 2023, the overall level of invested capital remained elevated compared to the starting point.
- Turnover of Capital (TO)
- The turnover of capital ratio exhibited a continuous improvement over the period, reflecting more efficient use of the invested capital to generate revenue. It rose from 0.65 in 2020 to 1.11 in 2021, then increased further to 1.27 in 2022. The upward momentum accelerated in the last two years, reaching 1.74 in 2023 and 1.85 in 2024. This pattern suggests enhanced operational efficiency and better capital utilization over time.
- Summary Insights
- The data reveals a robust increase in adjusted revenue accompanied by an improving turnover of capital ratio, signaling effective revenue generation from invested capital. Although invested capital generally trended upward, the decrease in 2023 may indicate a period of capital optimization or divestment, which did not negatively impact revenue growth. Overall, the company demonstrates a strong performance with growing revenues and increasingly efficient capital deployment over the observed years.
Effective Cash Tax Rate (CTR)
Airbnb Inc., CTR calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Tax Rate | ||||||
| CTR3 | ||||||
| Benchmarks | ||||||
| CTR, Competitors4 | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2024 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × ÷ =
4 Click competitor name to see calculations.
- Cash Operating Taxes
- There is a notable shift in cash operating taxes from a negative value of -36 million US dollars in 2020 to positive levels in subsequent years, indicating a transition from tax refunds or credits to actual cash tax payments. The amount increased substantially to 139 million in 2021, followed by a decrease to 68 million in 2022. The values then stabilized somewhat at 56 million in 2023 before rising again to 88 million in 2024. This pattern suggests variability in tax payments potentially linked to fluctuations in profitability or tax planning strategies.
- Net Operating Profit Before Taxes (NOPBT)
- The company experienced an initial loss in net operating profit before taxes of -4711 million US dollars in 2020, marking a significant negative performance in that year. However, from 2021 onwards, there is a consistent and substantial improvement. NOPBT turned positive in 2021 at 604 million, more than tripled to 2138 million in 2022, then decreased to 1737 million in 2023 before rising again to 2732 million in 2024. This demonstrates a strong recovery and growth trajectory after 2020, with some fluctuations but overall positive momentum.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate was not reported for 2020 but appears at 23.04% in 2021 coinciding with the return to profitability and positive tax payments. From 2022 through 2024, the effective tax rate is markedly lower and stable, averaging around 3.2%. This low and steady tax rate over the later years may reflect the application of tax incentives, deductions, or differences between accounting profit and taxable income, resulting in lower cash tax liabilities relative to operating profits.