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.
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- Statement of Comprehensive Income
- Balance Sheet: Assets
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Geographic Areas
- Common Stock Valuation Ratios
- Operating Profit Margin since 2005
- Current Ratio since 2005
- Debt to Equity since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
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Return on Invested Capital (ROIC)
Booking Holdings Inc., ROIC calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| ROIC3 | ||||||
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| Airbnb Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 NOPAT. See details »
2 Invested capital. See details »
3 2025 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The period demonstrates a significant and evolving pattern in financial performance as measured by Return on Invested Capital (ROIC). Initially, the metric was relatively low, but experienced substantial growth over the observed timeframe.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT increased markedly from US$671 million in 2021 to US$2,965 million in 2022. This growth continued into 2023, reaching US$3,758 million, and peaked in 2024 at US$6,151 million. A slight decrease to US$5,449 million was observed in 2025, though remaining substantially higher than the 2021 level.
- Invested Capital
- Invested capital decreased from US$15,004 million in 2021 to US$13,642 million in 2022, and continued to decline to US$11,415 million in 2023. A modest increase to US$12,973 million occurred in 2024, followed by a further adjustment to US$12,912 million in 2025. The overall trend indicates a reduction in capital employed, despite the increase in NOPAT.
- Return on Invested Capital (ROIC)
- ROIC began at 4.47% in 2021. A dramatic increase was then observed, rising to 21.73% in 2022 and further to 32.92% in 2023. The most substantial growth occurred between 2023 and 2024, with ROIC reaching 47.41%. While remaining high, ROIC experienced a slight decrease in 2025 to 42.20%, still representing a considerable improvement over the initial value. The increasing ROIC suggests a growing efficiency in capital allocation and profitability.
The combined effect of increasing NOPAT and fluctuating invested capital resulted in a substantial improvement in ROIC. The period indicates a positive trend in profitability relative to the capital employed, although the slight decrease in ROIC in 2025 warrants further investigation.
Decomposition of ROIC
Booking Holdings Inc., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2025 | = | × | × | ||||
| Dec 31, 2024 | = | × | × | ||||
| Dec 31, 2023 | = | × | × | ||||
| Dec 31, 2022 | = | × | × | ||||
| Dec 31, 2021 | = | × | × |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
The period demonstrates a significant improvement in financial performance, as evidenced by the increasing Return on Invested Capital (ROIC). This improvement can be attributed to concurrent positive trends in operating profitability, capital efficiency, and tax management. A decomposition of ROIC reveals the drivers behind this performance.
- Operating Profit Margin (OPM)
- The Operating Profit Margin exhibited a substantial increase from 13.04% in 2021 to 24.15% in 2022, continuing to 25.31% in 2023. Further growth was observed, peaking at 31.62% in 2024, before slightly decreasing to 28.03% in 2025. This indicates a strengthening ability to generate profit from core operations.
- Turnover of Capital (TO)
- The Turnover of Capital ratio shows a consistent upward trend, increasing from 0.73 in 2021 to 1.25 in 2022 and reaching 1.87 in 2023. While the rate of increase slowed in 2024 (1.83), it continued to improve in 2025, reaching 2.08. This suggests increasing efficiency in utilizing capital to generate revenue.
- Effective Cash Tax Rate Adjustment (1 – CTR)
- The metric representing the benefit from the cash tax rate increased significantly from 46.94% in 2021 to 71.84% in 2022, and remained high at 69.48% in 2023. A further increase to 81.95% was seen in 2024, followed by a slight decrease to 72.22% in 2025. This indicates improved tax efficiency, contributing to higher after-tax returns.
- Return on Invested Capital (ROIC)
- The ROIC experienced substantial growth, rising from 4.47% in 2021 to 21.73% in 2022, and continuing to 32.92% in 2023. The most significant increase occurred between 2023 and 2024, with ROIC reaching 47.41%. While decreasing slightly to 42.20% in 2025, the ROIC remained at a high level, reflecting the combined positive effects of improved operating margin, capital turnover, and tax efficiency.
The interplay between these factors demonstrates a clear pattern of improving profitability and capital utilization, resulting in a substantial increase in the return generated on invested capital. The slight decrease in ROIC in 2025, coupled with a minor reduction in operating profit margin and the tax rate adjustment, warrants further investigation, though the overall performance remains strong.
Operating Profit Margin (OPM)
Booking Holdings Inc., OPM calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Revenues | ||||||
| Profitability Ratio | ||||||
| OPM3 | ||||||
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| Airbnb Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2025 Calculation
OPM = 100 × NOPBT ÷ Revenues
= 100 × ÷ =
4 Click competitor name to see calculations.
The financial performance exhibits a notable increase in net operating profit before taxes between 2021 and 2024, followed by a modest increase in 2025. Revenues demonstrate consistent growth throughout the observed period. This revenue growth is accompanied by a significant improvement in operating profit margin, peaking in 2024 before experiencing a slight decline in 2025.
- Operating Profit Margin (OPM)
- The operating profit margin increased substantially from 13.04% in 2021 to 24.15% in 2022. This upward trajectory continued, reaching 25.31% in 2023 and peaking at 31.62% in 2024. A slight decrease to 28.03% is observed in 2025. This suggests improving operational efficiency and profitability over the period, with a minor reduction in efficiency in the most recent year.
The relationship between net operating profit before taxes and revenues indicates that the growth in profit is not solely attributable to revenue increases. The substantial gains in operating profit margin suggest effective cost management or pricing strategies were implemented, particularly between 2021 and 2024. The stabilization of the operating profit margin in 2025, while still high, warrants further investigation to determine the underlying factors contributing to the slight decrease.
Overall, the period demonstrates a strong positive trend in profitability, driven by both revenue growth and improved operational efficiency. The recent stabilization of the operating profit margin suggests a potential plateauing of efficiency gains, which may require attention to maintain future profitability improvements.
Turnover of Capital (TO)
Booking Holdings Inc., TO calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| Airbnb Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Invested capital. See details »
2 2025 Calculation
TO = Revenues ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
The analysis reveals a significant upward trend in the turnover of capital over the observed period. Revenues demonstrate consistent growth, while invested capital fluctuates, contributing to the observed changes in capital turnover.
- Revenue Trend
- Revenues increased steadily from US$10,958 million in 2021 to US$26,917 million in 2025. This represents a substantial overall increase, indicating strong growth in sales generation.
- Invested Capital Trend
- Invested capital decreased from US$15,004 million in 2021 to US$11,415 million in 2023, before increasing to US$12,973 million in 2024 and stabilizing at US$12,912 million in 2025. This suggests a period of capital efficiency improvement followed by reinvestment or stabilization of capital levels.
- Turnover of Capital (TO) Analysis
- The turnover of capital ratio increased from 0.73 in 2021 to 1.25 in 2022, indicating improved efficiency in generating revenue from invested capital. This trend continued with a substantial increase to 1.87 in 2023. A slight decrease to 1.83 was observed in 2024, followed by a further increase to 2.08 in 2025. The overall pattern demonstrates a significant and sustained improvement in the ability to generate revenue relative to the capital employed.
The combined effect of revenue growth and fluctuating invested capital resulted in a consistently rising turnover of capital ratio. The most substantial increase occurred between 2021 and 2023, suggesting a period of particularly effective capital utilization. The stabilization of invested capital in the later years, coupled with continued revenue growth, further contributed to the increasing ratio.
Effective Cash Tax Rate (CTR)
Booking Holdings Inc., CTR calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Tax Rate | ||||||
| CTR3 | ||||||
| Benchmarks | ||||||
| CTR, Competitors4 | ||||||
| Airbnb Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2025 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × ÷ =
4 Click competitor name to see calculations.
The relationship between cash operating taxes, net operating profit before taxes, and the resulting effective cash tax rate exhibits notable fluctuations over the five-year period. Cash operating taxes generally increased, though not consistently, while net operating profit before taxes demonstrated a more substantial increase initially, followed by stabilization.
- Cash Operating Taxes
- Cash operating taxes increased from US$758 million in 2021 to US$1,162 million in 2022, representing a significant rise. This growth continued to US$1,650 million in 2023 before decreasing to US$1,355 million in 2024. A further increase to US$2,096 million is observed in 2025, indicating a generally upward trend with some intermediate volatility.
- Net Operating Profit Before Taxes (NOPBT)
- Net operating profit before taxes experienced a substantial increase from US$1,429 million in 2021 to US$4,127 million in 2022. Growth continued, albeit at a slower pace, reaching US$5,408 million in 2023 and US$7,506 million in 2024. NOPBT remained relatively stable in 2025 at US$7,545 million, suggesting a plateauing of profit growth.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate displayed considerable variability. It began at 53.06% in 2021, then decreased significantly to 28.16% in 2022. A slight increase to 30.52% occurred in 2023, followed by a substantial decline to 18.05% in 2024. The rate then rose again to 27.78% in 2025. This fluctuation suggests changes in the composition of taxable income, the utilization of tax credits, or shifts in the geographic distribution of profits.
The decrease in the effective cash tax rate in 2022 and 2024, despite increasing cash operating taxes, is likely attributable to the significantly larger growth in net operating profit before taxes during those periods. The increase in the effective cash tax rate in 2025, coupled with the highest level of cash operating taxes, suggests a potential shift in the company’s tax profile or a reduction in the benefits of previously utilized tax planning strategies.