Microsoft Excel LibreOffice Calc

Applied Materials Inc. (AMAT)

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 28, 2018 Oct 29, 2017 Oct 30, 2016 Oct 25, 2015 Oct 26, 2014 Oct 27, 2013
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 3,303  3,953  2,092  1,291  1,101  217 
Invested capital2 11,090  12,475  10,186  11,631  9,431  8,519 
Performance Ratio
ROIC3 29.78% 31.69% 20.54% 11.10% 11.68% 2.55%

Based on: 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), 10-K (filing date: 2013-12-04).

1 NOPAT. See details »

2 Invested capital. See details »

3 2018 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 3,303 ÷ 11,090 = 29.78%

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 improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018.