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)
CSX Corp., ROIC calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | 4,863) | 4,534) | 3,545) | 4,174) | 4,106) | |
| Invested capital2 | 38,278) | 37,644) | 37,637) | 34,802) | 34,219) | |
| Performance Ratio | ||||||
| ROIC3 | 12.70% | 12.04% | 9.42% | 11.99% | 12.00% | |
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| FedEx Corp. | 7.54% | 11.15% | 4.40% | 2.29% | — | |
| Uber Technologies Inc. | -55.79% | -5.09% | -31.45% | — | — | |
| Union Pacific Corp. | 13.87% | 13.09% | 11.40% | — | — | |
| United Airlines Holdings Inc. | 6.49% | -1.52% | -15.38% | — | — | |
| United Parcel Service Inc. | 28.42% | 34.07% | 3.42% | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 NOPAT. See details »
2 Invested capital. See details »
3 2022 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 4,863 ÷ 38,278 = 12.70%
4 Click competitor name to see calculations.
- Net operating profit after taxes (NOPAT)
- Over the five-year period, the net operating profit after taxes exhibited some fluctuations. Starting at 4,106 million US dollars in 2018, it slightly increased to 4,174 million in 2019, followed by a notable decline in 2020 to 3,545 million. Subsequently, NOPAT recovered significantly, rising to 4,534 million in 2021 and continuing an upward trajectory to reach 4,863 million by 2022. This pattern indicates resilience and a strong rebound after a dip in 2020.
- Invested capital
- Invested capital showed a consistent upward trend throughout the period. Beginning at 34,219 million US dollars in 2018, it gradually increased each year, reaching 38,278 million by the end of 2022. The growth was steady, with the largest increment observed between 2019 and 2020. This steady increase suggests ongoing investments or capital allocation supporting the company's operations and growth.
- Return on invested capital (ROIC)
- The return on invested capital displayed relative stability with minor fluctuations. Starting at 12% in 2018, it remained almost flat at 11.99% in 2019, then declined to 9.42% in 2020, reflecting the impact of lower NOPAT in that year relative to invested capital. However, the ROIC rebounded in 2021 to 12.04% and further improved to 12.7% in 2022, surpassing the initial levels observed in 2018 and 2019. This recovery indicates enhanced efficiency in generating returns from the invested capital in the more recent years.
Decomposition of ROIC
CSX Corp., decomposition of ROIC
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
- Operating Profit Margin (OPM)
- The operating profit margin demonstrated a generally stable trend over the reported periods, starting at 40.49% in 2018 and peaking at 45.46% in 2021. In 2022, a slight decline to 41.38% was observed, indicating a modest reduction in operational profitability relative to sales after the peak year.
- Turnover of Capital (TO)
- The turnover of capital exhibited fluctuations, beginning at 0.36 in 2018, declining to its lowest point of 0.28 in 2020, then progressively increasing to 0.39 by the end of 2022. This pattern suggests a temporary reduction in the efficiency of capital usage during 2020, followed by recovery and improvement in subsequent years.
- Effective Cash Tax Rate (1 - CTR)
- The metric representing 1 minus the effective cash tax rate showed a gradual decrease over time, from 82.79% in 2018 to 79.11% in 2022. This steady decline indicates a slight increase in the effective cash tax rate over the years, implying that a growing proportion of pre-tax profits is being paid as cash taxes.
- Return on Invested Capital (ROIC)
- The return on invested capital initially remained steady around 12% in 2018 and 2019, dropped significantly to 9.42% in 2020, and then recovered to a higher level of 12.7% in 2022. This pattern reflects a temporary downturn in capital efficiency or profitability in 2020 but an overall positive recovery, ultimately achieving a return above the starting levels.
Operating Profit Margin (OPM)
CSX Corp., OPM calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | 4,863) | 4,534) | 3,545) | 4,174) | 4,106) | |
| Add: Cash operating taxes2 | 1,284) | 1,159) | 842) | 862) | 854) | |
| Net operating profit before taxes (NOPBT) | 6,147) | 5,693) | 4,387) | 5,037) | 4,960) | |
| Revenue | 14,853) | 12,522) | 10,583) | 11,937) | 12,250) | |
| Profitability Ratio | ||||||
| OPM3 | 41.38% | 45.46% | 41.45% | 42.19% | 40.49% | |
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| FedEx Corp. | 6.41% | 9.60% | 4.03% | 2.35% | — | |
| Uber Technologies Inc. | -27.42% | -2.86% | -57.75% | — | — | |
| Union Pacific Corp. | 41.70% | 44.40% | 41.95% | — | — | |
| United Airlines Holdings Inc. | 6.69% | -1.70% | -42.95% | — | — | |
| United Parcel Service Inc. | 15.59% | 17.83% | 3.14% | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2022 Calculation
OPM = 100 × NOPBT ÷ Revenue
= 100 × 6,147 ÷ 14,853 = 41.38%
4 Click competitor name to see calculations.
- Net Operating Profit Before Taxes (NOPBT)
- The net operating profit before taxes displayed a fluctuating but overall increasing trend over the period. Starting at 4,960 million US dollars in 2018, it experienced a slight increase to 5,037 million in 2019. However, there was a notable decline in 2020 to 4,387 million, likely reflecting challenging conditions in that year. Subsequently, the NOPBT recovered significantly, rising to 5,693 million in 2021 and further increasing to 6,147 million in 2022, marking the highest value in the five-year span.
- Revenue
- Revenue exhibited a somewhat volatile pattern across the years. It began at 12,250 million US dollars in 2018 and saw a marginal decrease to 11,937 million in 2019. In 2020, revenue declined more sharply to 10,583 million, aligning with the decrease in NOPBT. The following years saw a recovery, with revenue climbing back to 12,522 million in 2021 and surging to 14,853 million in 2022. The growth from 2021 to 2022 was particularly strong, indicating a significant rebound.
- Operating Profit Margin (OPM)
- The operating profit margin experienced relative stability with some fluctuations. It started at 40.49% in 2018, increased to a peak of 42.19% in 2019, then dipped slightly to 41.45% in 2020. A notable improvement occurred in 2021, lifting the margin to 45.46%, the highest across the period. In 2022, the margin decreased to 41.38% despite rising revenues and profits, which may suggest increased operating costs or changes in the cost structure during that year.
Turnover of Capital (TO)
CSX Corp., TO calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenue | 14,853) | 12,522) | 10,583) | 11,937) | 12,250) | |
| Invested capital1 | 38,278) | 37,644) | 37,637) | 34,802) | 34,219) | |
| Efficiency Ratio | ||||||
| TO2 | 0.39 | 0.33 | 0.28 | 0.34 | 0.36 | |
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| FedEx Corp. | 1.41 | 1.31 | 1.20 | 1.31 | — | |
| Uber Technologies Inc. | 1.95 | 1.09 | 0.53 | — | — | |
| Union Pacific Corp. | 0.42 | 0.37 | 0.33 | — | — | |
| United Airlines Holdings Inc. | 1.10 | 0.47 | 0.35 | — | — | |
| United Parcel Service Inc. | 2.24 | 2.19 | 2.55 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Invested capital. See details »
2 2022 Calculation
TO = Revenue ÷ Invested capital
= 14,853 ÷ 38,278 = 0.39
3 Click competitor name to see calculations.
- Revenue Trends
- Revenue exhibited a fluctuating pattern over the five-year period. It decreased from $12,250 million in 2018 to $10,583 million in 2020, representing a decline likely influenced by market conditions during that interval. Subsequently, revenue rebounded to $12,522 million in 2021 and increased further to $14,853 million in 2022, indicating strong recovery and growth in the later years.
- Invested Capital Trends
- Invested capital showed a generally increasing trend across the observed periods. Starting at $34,219 million in 2018, it rose steadily each year, reaching $38,278 million in 2022. This gradual increase suggests ongoing capital investment or asset growth, which may support operational expansion or sustained capacity enhancement.
- Turnover of Capital (TO) Analysis
- The turnover of capital ratio, calculated as revenue divided by invested capital, declined from 0.36 in 2018 to a low of 0.28 in 2020. This decline aligns with the reduction in revenue combined with increased invested capital during this period, indicating less efficient utilization of capital. However, the ratio improved to 0.33 in 2021 and further to 0.39 in 2022, surpassing the initial 2018 level, which demonstrates enhanced capital efficiency and better utilization of invested assets in generating revenue toward the end of the period.
- Overall Observations
- The data reveals an initial period of declining revenue and reduced capital efficiency from 2018 through 2020, possibly due to adverse external factors. Despite continuous growth in invested capital, the capacity to generate revenue from these assets weakened temporarily. From 2021 onwards, there was a clear recovery and growth in revenue, accompanied by improved turnover of capital, indicating a positive shift in operational performance and asset utilization. The consistent increase in invested capital may reflect strategic investments positioning the company for sustained growth.
Effective Cash Tax Rate (CTR)
CSX Corp., CTR calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | 4,863) | 4,534) | 3,545) | 4,174) | 4,106) | |
| Add: Cash operating taxes2 | 1,284) | 1,159) | 842) | 862) | 854) | |
| Net operating profit before taxes (NOPBT) | 6,147) | 5,693) | 4,387) | 5,037) | 4,960) | |
| Tax Rate | ||||||
| CTR3 | 20.89% | 20.36% | 19.19% | 17.12% | 17.21% | |
| Benchmarks | ||||||
| CTR, Competitors4 | ||||||
| FedEx Corp. | 16.39% | 11.08% | 9.29% | 25.81% | — | |
| Uber Technologies Inc. | — | — | — | — | — | |
| Union Pacific Corp. | 20.10% | 21.23% | 18.83% | — | — | |
| United Airlines Holdings Inc. | 11.59% | — | — | — | — | |
| United Parcel Service Inc. | 18.63% | 12.80% | 57.24% | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2022 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 1,284 ÷ 6,147 = 20.89%
4 Click competitor name to see calculations.
- Net Operating Profit Before Taxes (NOPBT)
- The net operating profit before taxes experienced fluctuations over the analyzed period. Starting at 4,960 million USD at the end of 2018, it slightly increased to 5,037 million USD in 2019 before declining to 4,387 million USD in 2020. Thereafter, a notable recovery occurred with profits rising to 5,693 million USD in 2021 and further to 6,147 million USD in 2022, indicating a positive upward trend in recent years.
- Cash Operating Taxes
- Cash operating taxes rose consistently throughout the period reviewed. Beginning at 854 million USD in 2018, minor growth was observed in 2019 and 2020, reaching 862 million USD and 842 million USD respectively. A more significant increase took place in 2021, with taxes amounting to 1,159 million USD, followed by a further increase to 1,284 million USD in 2022. This pattern reflects growing tax obligations in line with improving profitability.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate exhibited a general upward trend, moving from 17.21% in 2018 to 20.89% in 2022. The rate remained relatively stable around 17% in 2018 and 2019 but increased to 19.19% in 2020, and continued its rise through 2021 and 2022. This increase suggests a gradual intensification of the tax burden relative to operating profit before taxes.
- Summary of Trends
- Overall, the data shows that while net operating profit before taxes experienced a dip in 2020, it rebounded strongly over the following two years. The rising cash operating taxes correspond to this profitability improvement but also reflect a higher effective tax rate. The increase in the effective cash tax rate implies that the company has been subject to higher tax obligations as a percentage of its taxable income, impacting net profitability despite growth in operating profits.