Microsoft Excel LibreOffice Calc

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

Microsoft Excel LibreOffice Calc
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 3,953  2,093  1,292  1,102  218  56 
Invested capital2 12,475  10,186  11,631  9,431  8,519  8,465 
Ratio
ROIC3 31.69% 20.55% 11.11% 11.69% 2.56% 0.66%

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 × 3,953 ÷ 12,475 = 31.69%

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.