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.
Return on Invested Capital (ROIC)
Autodesk Inc., ROIC calculation, comparison to benchmarks
| Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | Jan 31, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | 493) | 1,402) | 970) | 833) | 1,197) | 41) | |
| Invested capital2 | 7,325) | 7,372) | 6,835) | 5,723) | 5,535) | 4,412) | |
| Performance Ratio | |||||||
| ROIC3 | 6.73% | 19.02% | 14.20% | 14.55% | 21.62% | 0.93% | |
| Benchmarks | |||||||
| ROIC, Competitors4 | |||||||
| Accenture PLC | 20.33% | 21.14% | 23.93% | 25.83% | — | — | |
| Adobe Inc. | 21.19% | 21.68% | 26.93% | 29.44% | 21.67% | — | |
| AppLovin Corp. | 35.87% | 11.27% | -3.27% | 0.83% | — | — | |
| Cadence Design Systems Inc. | 14.27% | 24.69% | 23.98% | 24.26% | — | — | |
| Datadog Inc. | 10.63% | 14.64% | 8.75% | 16.66% | — | — | |
| International Business Machines Corp. | 4.46% | 7.72% | -0.61% | 3.86% | — | — | |
| Intuit Inc. | 10.69% | 8.53% | 9.30% | 17.64% | — | — | |
| Microsoft Corp. | 25.70% | 28.71% | 36.59% | 45.56% | — | — | |
| Oracle Corp. | 11.71% | 10.34% | 9.70% | 17.55% | — | — | |
| Palantir Technologies Inc. | 13.53% | 16.73% | -7.21% | -14.60% | — | — | |
| Palo Alto Networks Inc. | 23.08% | 28.59% | 19.73% | 11.48% | — | — | |
| Salesforce Inc. | 6.31% | 2.31% | 5.42% | 8.25% | — | — | |
| ServiceNow Inc. | 23.07% | 22.31% | 17.69% | 18.88% | — | — | |
| Synopsys Inc. | 10.31% | 11.03% | 17.54% | 11.52% | 11.63% | — | |
| Workday Inc. | 7.80% | 1.25% | 6.56% | 1.38% | — | — | |
Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).
1 NOPAT. See details »
2 Invested capital. See details »
3 2024 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 493 ÷ 7,325 = 6.73%
4 Click competitor name to see calculations.
The financial performance over the analyzed six-year period is characterized by significant volatility in operational earnings contrasted with a steady expansion of the capital base, resulting in inconsistent returns on invested capital.
- Net Operating Profit After Taxes (NOPAT)
- Operational profitability exhibited extreme fluctuations, beginning at US$ 41 million in 2019 and surging to US$ 1,197 million in 2020. Following a period of moderate variance between 2021 and 2022, NOPAT reached a peak of US$ 1,402 million in 2023 before experiencing a sharp contraction to US$ 493 million in 2024.
- Invested Capital
- A consistent upward trend is observed in the capital base, which increased from US$ 4,412 million in 2019 to a peak of US$ 7,372 million in 2023. This indicates a sustained increase in the deployment of resources, with the capital level remaining relatively stable at US$ 7,325 million by Jan 31, 2024.
- Return on Invested Capital (ROIC)
- The ROIC mirrors the volatility of NOPAT relative to the expanding capital base. After a negligible return of 0.93% in 2019, the ratio spiked to 21.62% in 2020. Although the ratio maintained a range between 14.20% and 19.02% from 2021 through 2023, it declined sharply to 6.73% in 2024, reflecting a marked decrease in capital efficiency during the final period.
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Decomposition of ROIC
Autodesk Inc., decomposition of ROIC
Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).
1 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
The Return on Invested Capital (ROIC) exhibits significant volatility over the analyzed six-year period, characterized by a sharp ascent after 2019 and a substantial contraction by 2024. The fluctuations in ROIC are primarily driven by variations in operating profit margins rather than changes in capital efficiency.
- Operating Profit Margin (OPM)
- Operating margins demonstrate high instability, starting at a low of 3.88% in 2019 before spiking to 30.50% in 2020. Following a period of moderate fluctuation between 2021 and 2022, a peak of 31.35% was reached in 2023, followed by a sharp decline to 15.49% in 2024. This indicates that operating efficiency is the primary variable affecting the overall return on capital.
- Turnover of Capital (TO)
- Capital turnover remained relatively stable throughout the period, ranging between 0.61 and 0.79. A gradual improvement was observed from 2019 through 2023, where the ratio peaked at 0.79, before returning to 0.71 in 2024. The absence of dramatic swings suggests that asset utilization has remained consistent and is not the primary driver of ROIC volatility.
- Effective Cash Tax Rate Impact (1 – CTR)
- The portion of profit retained after taxes showed an extreme increase between 2019 (39.21%) and 2020 (93.62%). From 2022 onwards, a consistent downward trend is observed, with the rate decreasing from 90.62% to 61.43% by 2024. This decline in the after-tax retention rate has contributed to the erosion of ROIC in the most recent fiscal year.
- Return on Invested Capital (ROIC)
- ROIC closely mirrored the trajectory of the operating profit margin. After an initial surge from 0.93% in 2019 to 21.62% in 2020, the return remained in the mid-to-high teens until 2023 (19.02%). The convergence of a declining operating margin and a lower after-tax retention rate resulted in a significant drop to 6.73% in 2024, representing the lowest return since 2019.
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Operating Profit Margin (OPM)
Autodesk Inc., OPM calculation, comparison to benchmarks
| Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | Jan 31, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | 493) | 1,402) | 970) | 833) | 1,197) | 41) | |
| Add: Cash operating taxes2 | 310) | 415) | 100) | 130) | 82) | 64) | |
| Net operating profit before taxes (NOPBT) | 803) | 1,817) | 1,071) | 962) | 1,278) | 105) | |
| Net revenue | 5,497) | 5,005) | 4,386) | 3,790) | 3,274) | 2,570) | |
| Add: Increase (decrease) in deferred revenue | (316) | 790) | 430) | 353) | 916) | 136) | |
| Adjusted net revenue | 5,181) | 5,795) | 4,816) | 4,144) | 4,190) | 2,706) | |
| Profitability Ratio | |||||||
| OPM3 | 15.49% | 31.35% | 22.23% | 23.23% | 30.50% | 3.88% | |
| Benchmarks | |||||||
| OPM, Competitors4 | |||||||
| Accenture PLC | 15.15% | 14.56% | 15.48% | 16.65% | — | — | |
| Adobe Inc. | 32.23% | 35.97% | 36.56% | 40.89% | 34.42% | — | |
| AppLovin Corp. | 40.17% | 20.43% | -1.60% | 5.23% | — | — | |
| Cadence Design Systems Inc. | 31.87% | 31.47% | 32.28% | 28.51% | — | — | |
| Datadog Inc. | 9.47% | 8.91% | 6.57% | 13.48% | — | — | |
| International Business Machines Corp. | 11.61% | 17.71% | 3.11% | 11.04% | — | — | |
| Intuit Inc. | 24.30% | 23.08% | 21.00% | 28.02% | — | — | |
| Microsoft Corp. | 45.67% | 43.20% | 43.28% | 43.49% | — | — | |
| Oracle Corp. | 30.01% | 26.91% | 24.11% | 40.03% | — | — | |
| Palantir Technologies Inc. | 11.18% | 9.03% | -8.42% | -23.57% | — | — | |
| Palo Alto Networks Inc. | 28.26% | 29.22% | 23.90% | 16.95% | — | — | |
| Salesforce Inc. | 19.05% | 8.46% | 16.42% | 20.31% | — | — | |
| ServiceNow Inc. | 20.13% | 18.76% | 14.87% | 17.20% | — | — | |
| Synopsys Inc. | 24.97% | 20.63% | 27.91% | 22.47% | 22.28% | — | |
| Workday Inc. | 8.65% | 3.29% | 8.82% | 2.23% | — | — | |
Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2024 Calculation
OPM = 100 × NOPBT ÷ Adjusted net revenue
= 100 × 803 ÷ 5,181 = 15.49%
4 Click competitor name to see calculations.
The operating profit margin (OPM) exhibited significant volatility between 2019 and 2024, characterized by a rapid initial expansion, a mid-period peak, and a sharp contraction in the final year of the observed period.
- Revenue Trajectory
- Adjusted net revenue demonstrated a consistent growth trend from 2019 to 2023, increasing from 2,706 million to a peak of 5,795 million. This growth trend reversed in 2024, with revenue contracting to 5,181 million.
- Net Operating Profit Before Taxes (NOPBT) Performance
- NOPBT showed substantial fluctuations over the six-year span. A sharp increase occurred between 2019 and 2020, where profit rose from 105 million to 1,278 million. Following a period of moderate instability in 2021 and 2022, NOPBT reached its highest point in 2023 at 1,817 million, before experiencing a steep decline to 803 million in 2024.
- Operating Profit Margin (OPM) Analysis
- The OPM mirrored the volatility of the NOPBT, starting at a low of 3.88% in 2019 and surging to 30.50% in 2020. The margin remained relatively stable between 22.23% and 23.23% during 2021 and 2022, before ascending to a peak of 31.35% in 2023. A significant margin compression followed in 2024, with the OPM dropping to 15.49%, indicating a marked decrease in operational profitability relative to revenue.
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Turnover of Capital (TO)
Autodesk Inc., TO calculation, comparison to benchmarks
| Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | Jan 31, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net revenue | 5,497) | 5,005) | 4,386) | 3,790) | 3,274) | 2,570) | |
| Add: Increase (decrease) in deferred revenue | (316) | 790) | 430) | 353) | 916) | 136) | |
| Adjusted net revenue | 5,181) | 5,795) | 4,816) | 4,144) | 4,190) | 2,706) | |
| Invested capital1 | 7,325) | 7,372) | 6,835) | 5,723) | 5,535) | 4,412) | |
| Efficiency Ratio | |||||||
| TO2 | 0.71 | 0.79 | 0.70 | 0.72 | 0.76 | 0.61 | |
| Benchmarks | |||||||
| TO, Competitors3 | |||||||
| Accenture PLC | 1.76 | 1.94 | 2.08 | 1.95 | — | — | |
| Adobe Inc. | 0.88 | 0.80 | 0.86 | 0.80 | 0.70 | — | |
| AppLovin Corp. | 1.04 | 0.73 | 0.53 | 0.50 | — | — | |
| Cadence Design Systems Inc. | 0.65 | 1.00 | 1.00 | 0.98 | — | — | |
| Datadog Inc. | 1.10 | 1.60 | 1.45 | 1.26 | — | — | |
| International Business Machines Corp. | 0.57 | 0.56 | 0.58 | 0.53 | — | — | |
| Intuit Inc. | 0.65 | 0.61 | 0.52 | 0.79 | — | — | |
| Microsoft Corp. | 0.72 | 0.88 | 1.04 | 1.20 | — | — | |
| Oracle Corp. | 0.53 | 0.52 | 0.54 | 0.51 | — | — | |
| Palantir Technologies Inc. | 1.15 | 1.86 | 0.60 | 0.61 | — | — | |
| Palo Alto Networks Inc. | 0.94 | 1.01 | 0.86 | 0.74 | — | — | |
| Salesforce Inc. | 0.43 | 0.40 | 0.36 | 0.44 | — | — | |
| ServiceNow Inc. | 1.22 | 1.24 | 1.24 | 1.16 | — | — | |
| Synopsys Inc. | 0.60 | 0.71 | 0.71 | 0.63 | 0.58 | — | |
| Workday Inc. | 0.90 | 0.82 | 0.74 | 0.77 | — | — | |
Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).
1 Invested capital. See details »
2 2024 Calculation
TO = Adjusted net revenue ÷ Invested capital
= 5,181 ÷ 7,325 = 0.71
3 Click competitor name to see calculations.
The analysis of capital efficiency from 2019 to 2024 reveals a period of volatility characterized by an initial expansion in revenue efficiency, followed by fluctuations and a recent contraction in capital turnover.
- Revenue Growth and Volatility
- Adjusted net revenue experienced a significant surge between 2019 and 2020, rising from US$ 2,706 million to US$ 4,190 million. Following a period of relative stability in 2021, revenue climbed to a peak of US$ 5,795 million in 2023. However, the 2024 fiscal year saw a decline to US$ 5,181 million, representing a contraction in top-line performance.
- Invested Capital Expansion
- Invested capital demonstrated a consistent upward trajectory for the majority of the period, increasing from US$ 4,412 million in 2019 to a peak of US$ 7,372 million in 2023. This indicates a substantial increase in the resource base over five years. In 2024, the invested capital stabilized, showing a marginal decrease to US$ 7,325 million.
- Capital Turnover Ratio Dynamics
- The turnover of capital ratio fluctuated throughout the analyzed period, reflecting varying levels of efficiency in generating revenue from the invested capital base. A sharp improvement was observed from 0.61 in 2019 to 0.76 in 2020, signaling a rapid scaling of revenue relative to capital investment. After a slight downward trend in 2021 and 2022, efficiency reached its highest point in 2023 at 0.79, coinciding with the peak in adjusted net revenue. The 2024 ratio of 0.71 indicates a decline in efficiency, driven by the reduction in revenue while the invested capital remained nearly constant.
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Effective Cash Tax Rate (CTR)
Autodesk Inc., CTR calculation, comparison to benchmarks
| Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | Jan 31, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | 493) | 1,402) | 970) | 833) | 1,197) | 41) | |
| Add: Cash operating taxes2 | 310) | 415) | 100) | 130) | 82) | 64) | |
| Net operating profit before taxes (NOPBT) | 803) | 1,817) | 1,071) | 962) | 1,278) | 105) | |
| Tax Rate | |||||||
| CTR3 | 38.57% | 22.84% | 9.38% | 13.48% | 6.38% | 60.79% | |
| Benchmarks | |||||||
| CTR, Competitors4 | |||||||
| Accenture PLC | 23.87% | 25.34% | 25.55% | 20.47% | — | — | |
| Adobe Inc. | 25.54% | 24.54% | 14.22% | 10.28% | 9.63% | — | |
| AppLovin Corp. | 13.75% | 24.45% | — | 68.18% | — | — | |
| Cadence Design Systems Inc. | 31.39% | 21.85% | 25.88% | 13.59% | — | — | |
| Datadog Inc. | -1.95% | -2.78% | 7.98% | 1.83% | — | — | |
| International Business Machines Corp. | 32.07% | 22.38% | 133.97% | 33.45% | — | — | |
| Intuit Inc. | 32.36% | 39.49% | 14.74% | 20.15% | — | — | |
| Microsoft Corp. | 21.33% | 24.32% | 18.98% | 13.05% | — | — | |
| Oracle Corp. | 25.73% | 25.66% | 26.20% | 13.28% | — | — | |
| Palantir Technologies Inc. | -4.95% | 0.60% | — | — | — | — | |
| Palo Alto Networks Inc. | 13.32% | 2.83% | 3.82% | 8.83% | — | — | |
| Salesforce Inc. | 23.51% | 31.02% | 8.32% | 6.83% | — | — | |
| ServiceNow Inc. | 5.72% | 4.32% | 4.41% | 5.03% | — | — | |
| Synopsys Inc. | 30.80% | 24.60% | 11.45% | 18.39% | 10.36% | — | |
| Workday Inc. | -0.43% | 53.58% | -0.77% | 19.25% | — | — | |
Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2024 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 310 ÷ 803 = 38.57%
4 Click competitor name to see calculations.
The effective cash tax rate (CTR) exhibits significant volatility over the analyzed six-year period, characterized by an initial sharp contraction followed by a steady upward trajectory in the most recent fiscal years. This volatility is closely linked to substantial fluctuations in the Net Operating Profit Before Taxes (NOPBT).
- Effective Cash Tax Rate Trends
- The CTR experienced a precipitous decline from 60.79% in 2019 to 6.38% in 2020. For the following three years, the rate remained relatively suppressed, oscillating between 6.38% and 13.48%. A reversal of this trend occurred starting in 2023, with the CTR climbing to 22.84% and continuing its ascent to 38.57% by January 31, 2024.
- Net Operating Profit Before Taxes (NOPBT) Correlation
- NOPBT demonstrated extreme variance, rising from 105 million in 2019 to a peak of 1,817 million in 2023. A significant contraction is noted in 2024, where NOPBT dropped to 803 million. The data indicates that the lowest CTR levels (2020-2022) coincided with a period of generally higher operating profits compared to the 2019 baseline, suggesting the utilization of tax efficiencies or deferred tax assets during those years.
- Recent Divergence in Tax Burden
- A notable divergence is observed between 2023 and 2024. While NOPBT decreased by approximately 55.7%, cash operating taxes only decreased by 25.3%, falling from 415 million to 310 million. This disproportionate decline resulted in the effective cash tax rate increasing from 22.84% to 38.57%, representing a heightened tax burden relative to operating profitability in the final period.
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