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Applied Materials Inc. (AMAT)

Return on Capital (ROC)

Advanced level

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)

Applied Materials Inc., ROIC calculation

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Oct 27, 2019 Oct 28, 2018 Oct 29, 2017 Oct 30, 2016 Oct 25, 2015 Oct 26, 2014
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 2,928  3,303  3,953  2,092  1,291  1,101 
Invested capital2 10,129  11,090  12,475  10,186  11,631  9,431 
Performance Ratio
ROIC3 28.91% 29.78% 31.69% 20.54% 11.10% 11.68%

Based on: 10-K (filing date: 2019-12-13), 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-15), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-09), 10-K (filing date: 2014-12-17).

1 NOPAT. See details »

2 Invested capital. See details »

3 2019 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 2,928 ÷ 10,129 = 28.91%

Performance ratio Description The company
ROIC A measure of the periodic, after tax, cash-on-cash yield earned in the business. Applied Materials Inc.’s ROIC deteriorated from 2017 to 2018 and from 2018 to 2019.