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.
Paying user area
Try for free
Amgen Inc. pages available for free this week:
- Analysis of Profitability Ratios
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Aggregate Accruals
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Amgen Inc. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Return on Invested Capital (ROIC)
Amgen Inc., ROIC calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| ROIC3 | ||||||
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| AbbVie Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 NOPAT. See details »
2 Invested capital. See details »
3 2025 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The analysis reveals fluctuations in Return on Invested Capital (ROIC) over the five-year period. Net operating profit after taxes (NOPAT) and invested capital both exhibit variability, influencing the observed ROIC trends.
- ROIC Trend
- ROIC initially increased from 15.93% in 2021 to 16.11% in 2022, indicating improved efficiency in generating profits from invested capital. However, a significant decline followed, with ROIC decreasing to 11.15% in 2023 and further to 8.51% in 2024. A substantial recovery is then observed in 2025, with ROIC rising to 15.73%.
- NOPAT Analysis
- NOPAT remained relatively stable between 2021 and 2022, experiencing a slight decrease. A considerable increase in NOPAT is evident in 2023, reaching US$7,802 million. This was followed by a substantial decrease in 2024 to US$5,377 million, before a strong rebound in 2025, reaching US$9,219 million. These fluctuations in NOPAT directly correlate with the observed changes in ROIC.
- Invested Capital Analysis
- Invested capital showed a minor decrease from 2021 to 2022. A significant increase occurred in 2023, rising to US$69,976 million, representing a substantial expansion of the capital base. Invested capital then decreased in both 2024 and 2025, reaching US$63,169 million and US$58,618 million respectively. The increase in invested capital in 2023, coupled with a smaller increase in NOPAT, contributed to the decline in ROIC during that year.
The period demonstrates a cyclical pattern. The recovery in ROIC in 2025 is attributable to the substantial increase in NOPAT, despite the continued decrease in invested capital. The interplay between NOPAT and invested capital is critical in understanding the observed ROIC performance.
Decomposition of ROIC
Amgen Inc., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2025 | = | × | × | ||||
| Dec 31, 2024 | = | × | × | ||||
| Dec 31, 2023 | = | × | × | ||||
| Dec 31, 2022 | = | × | × | ||||
| Dec 31, 2021 | = | × | × |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
The period under review demonstrates fluctuating performance in key profitability and efficiency metrics. Return on Invested Capital (ROIC) experienced volatility, influenced by changes in operating profitability, capital efficiency, and tax rates. A detailed examination of the components reveals specific trends.
- Operating Profit Margin (OPM)
- The Operating Profit Margin exhibited an initial increase from 32.55% in 2021 to a peak of 40.00% in 2023. However, a substantial decline to 24.36% was observed in 2024, followed by a recovery to 33.48% in 2025. This suggests potential cyclicality or the impact of specific events affecting operational performance in 2024.
- Turnover of Capital (TO)
- Turnover of Capital remained relatively stable between 2021 and 2022, at 0.60 and 0.62 respectively. A significant decrease to 0.38 occurred in 2023, indicating reduced efficiency in utilizing capital to generate revenue. This was partially offset by increases to 0.51 in 2024 and a return to 0.60 in 2025, suggesting a recovery in capital utilization.
- Effective Cash Tax Rate Adjustment
- The (1 – Effective Cash Tax Rate) metric, representing the portion of operating profit retained after taxes, generally decreased from 81.07% in 2021 to 68.91% in 2024. A subsequent increase to 78.33% in 2025 was noted. This fluctuation in the after-tax profit retention rate contributes to the overall ROIC variability.
- Return on Invested Capital (ROIC)
- ROIC mirrored the combined effects of the aforementioned factors. It rose slightly from 15.93% in 2021 to 16.11% in 2022, then declined to 11.15% in 2023, reaching a low of 8.51% in 2024. A substantial recovery to 15.73% occurred in 2025. The 2024 low in ROIC appears directly linked to the simultaneous declines in Operating Profit Margin and Turnover of Capital, partially mitigated by the tax rate adjustment.
The interplay between operating margin, capital turnover, and the effective tax rate significantly influences the overall ROIC. The recovery observed in 2025 suggests a potential stabilization of these factors, but continued monitoring is warranted to assess the sustainability of this improvement.
Operating Profit Margin (OPM)
Amgen Inc., OPM calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Product sales | ||||||
| Profitability Ratio | ||||||
| OPM3 | ||||||
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| AbbVie Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2025 Calculation
OPM = 100 × NOPBT ÷ Product sales
= 100 × ÷ =
4 Click competitor name to see calculations.
The operating profit margin exhibited considerable fluctuation over the five-year period. Initial increases were followed by a substantial decline and subsequent recovery, indicating potential shifts in the company’s cost structure or revenue generation strategies.
- Operating Profit Margin (OPM) - Trend Analysis
- The operating profit margin increased from 32.55% in 2021 to 35.35% in 2022, suggesting improved operational efficiency or pricing power. This positive trend continued into 2023, with the OPM reaching a peak of 40.00%. However, 2024 witnessed a significant decrease to 24.36%, representing a substantial contraction in profitability. The OPM partially recovered in 2025, rising to 33.48%, but remained below the levels observed in 2022 and 2023.
Net operating profit before taxes generally increased alongside the operating profit margin until 2023, then decreased in 2024 before increasing again in 2025. This suggests a correlation between overall profitability and the efficiency of operations. Product sales demonstrated consistent growth throughout the period, increasing from US$24,297 million in 2021 to US$35,148 million in 2025. However, the decline in OPM in 2024, despite increased product sales, indicates that revenue growth alone was insufficient to maintain profitability levels.
- Relationship between Product Sales and OPM
- While product sales consistently increased, the operating profit margin did not follow a similar trajectory. The substantial drop in OPM in 2024, concurrent with rising product sales, suggests potential increases in the cost of goods sold, operating expenses, or a shift in the sales mix towards lower-margin products. The partial recovery in 2025, alongside continued sales growth, implies some degree of cost control or improved pricing strategies were implemented.
The volatility in the operating profit margin warrants further investigation to determine the underlying drivers of these fluctuations. A detailed analysis of cost components and revenue streams would be necessary to understand the factors contributing to the observed trends and to assess the sustainability of future profitability.
Turnover of Capital (TO)
Amgen Inc., TO calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Product sales | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| AbbVie Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Invested capital. See details »
2 2025 Calculation
TO = Product sales ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
The analysis reveals fluctuating trends in the relationship between product sales and invested capital over the five-year period. Product sales demonstrate a consistent upward trajectory, while invested capital exhibits more volatility. Consequently, the Turnover of Capital (TO) ratio, which measures how efficiently invested capital is used to generate sales, displays considerable variation.
- Product Sales
- Product sales increased steadily from US$24,297 million in 2021 to US$35,148 million in 2025. Growth was particularly strong between 2022 and 2024, with a significant jump from US$24,801 million to US$32,026 million. This indicates a robust expansion in revenue generation.
- Invested Capital
- Invested capital decreased slightly from US$40,247 million in 2021 to US$39,722 million in 2022. A substantial increase occurred in 2023, reaching US$69,976 million, before declining to US$63,169 million in 2024 and further to US$58,618 million in 2025. This suggests significant capital allocation in 2023, followed by subsequent adjustments and potential capital redeployment or asset sales.
- Turnover of Capital (TO)
- The Turnover of Capital ratio began at 0.60 in 2021 and rose to 0.62 in 2022, indicating a slight improvement in capital utilization. However, the ratio decreased substantially to 0.38 in 2023, coinciding with the peak in invested capital. A partial recovery was observed in 2024, with the ratio increasing to 0.51. The ratio returned to 0.60 in 2025, mirroring the level observed in 2021. The fluctuations in TO suggest that the efficiency of capital usage is sensitive to changes in the level of invested capital and, to a lesser extent, product sales.
The significant increase in invested capital in 2023 appears to have temporarily reduced the efficiency with which capital was turned into sales. The subsequent decline in invested capital in 2024 and 2025, coupled with continued sales growth, contributed to the partial recovery of the TO ratio. The return to a TO ratio of 0.60 in 2025 suggests a stabilization of capital utilization efficiency, aligning with the initial level observed in 2021.
Effective Cash Tax Rate (CTR)
Amgen Inc., CTR calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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 | ||||||
| AbbVie Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2025 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × ÷ =
4 Click competitor name to see calculations.
The effective cash tax rate exhibited considerable fluctuation over the five-year period. Cash operating taxes generally increased, though with some variation, while net operating profit before taxes also demonstrated an overall upward trend punctuated by a decline in the fourth year.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate began at 18.93% in 2021 and increased substantially to 27.01% in 2022. This upward movement continued, albeit at a slower pace, reaching 27.52% in 2023. A notable increase was observed in 2024, with the rate rising to 31.09%. Subsequently, the rate decreased significantly in 2025, falling to 21.67%.
Cash operating taxes increased from US$1,497 million in 2021 to US$2,368 million in 2022, and further to US$2,963 million in 2023. A decrease to US$2,426 million was recorded in 2024, followed by a slight increase to US$2,551 million in 2025. This suggests a correlation with the fluctuations in net operating profit before taxes.
- Net Operating Profit Before Taxes (NOPBT)
- Net operating profit before taxes showed an increasing trend from US$7,909 million in 2021 to US$8,767 million in 2022, and then to US$10,765 million in 2023. A significant decline occurred in 2024, with NOPBT falling to US$7,803 million. However, a strong recovery was seen in 2025, with NOPBT rising to US$11,769 million, exceeding the previous peak.
The interplay between cash operating taxes and net operating profit before taxes explains the observed CTR movements. The substantial increase in CTR from 2021 to 2024 appears linked to both rising tax payments and, particularly in 2024, a decrease in pre-tax profits. The decline in CTR in 2025 is attributable to the combination of relatively stable tax payments and a significant increase in net operating profit before taxes.