.Return on Capital (ROC)
Difficulty: Advanced
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
| Oct 29, 2017 | Oct 30, 2016 | Oct 25, 2015 | Oct 26, 2014 | Oct 27, 2013 | Oct 28, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| | Net operating profit after taxes (NOPAT)1 | ||||||
| | Invested capital2 | ||||||
| Ratio | |||||||
| | ROIC3 | % | % | % | % | % | % |
Source: Based on data from Applied Materials Inc. Annual Reports
2017 Calculations
1 NOPAT. See Details »
2 Invested capital. See Details »
3 ROIC = 100 × NOPAT ÷ Invested capital
= 100 × ÷ = %
| 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 improved from 2015 to 2016 and from 2016 to 2017. |
