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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Cadence Design Systems Inc. pages available for free this week:
- Statement of Comprehensive Income
- Balance Sheet: Assets
- Cash Flow Statement
- Common-Size Balance Sheet: Assets
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Geographic Areas
- Return on Equity (ROE) since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Revenues
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Return on Invested Capital (ROIC)
Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 28, 2019 | Dec 29, 2018 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | ||||||
Net operating profit after taxes (NOPAT)1 | ||||||
Invested capital2 | ||||||
Performance Ratio | ||||||
ROIC3 | ||||||
Benchmarks | ||||||
ROIC, Competitors4 | ||||||
Accenture PLC | ||||||
Adobe Inc. | ||||||
International Business Machines Corp. | ||||||
Intuit Inc. | ||||||
Microsoft Corp. | ||||||
Oracle Corp. | ||||||
Palo Alto Networks Inc. | ||||||
Salesforce Inc. | ||||||
ServiceNow Inc. | ||||||
Synopsys Inc. |
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: 2019-12-28), 10-K (reporting date: 2018-12-29).
1 NOPAT. See details »
2 Invested capital. See details »
3 2022 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
Performance ratio | Description | The company |
---|---|---|
ROIC | A measure of the periodic, after tax, cash-on-cash yield earned in the business. | Cadence Design Systems Inc. ROIC deteriorated from 2020 to 2021 and from 2021 to 2022. |
Decomposition of ROIC
ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
---|---|---|---|---|---|---|---|
Dec 31, 2022 | = | × | × | ||||
Dec 31, 2021 | = | × | × | ||||
Dec 31, 2020 | = | × | × | ||||
Dec 28, 2019 | = | × | × | ||||
Dec 29, 2018 | = | × | × |
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: 2019-12-28), 10-K (reporting date: 2018-12-29).
1 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
The primary reason for the decrease in return on invested capital (ROIC) over 2022 year is the increase in effective cash tax rate (CTR).
Operating Profit Margin (OPM)
Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 28, 2019 | Dec 29, 2018 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | ||||||
Net operating profit after taxes (NOPAT)1 | ||||||
Add: Cash operating taxes2 | ||||||
Net operating profit before taxes (NOPBT) | ||||||
Revenue | ||||||
Add: Increase (decrease) in deferred revenue | ||||||
Adjusted revenue | ||||||
Profitability Ratio | ||||||
OPM3 | ||||||
Benchmarks | ||||||
OPM, Competitors4 | ||||||
Accenture PLC | ||||||
Adobe Inc. | ||||||
International Business Machines Corp. | ||||||
Intuit Inc. | ||||||
Microsoft Corp. | ||||||
Oracle Corp. | ||||||
Palo Alto Networks Inc. | ||||||
Salesforce Inc. | ||||||
ServiceNow Inc. | ||||||
Synopsys Inc. |
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: 2019-12-28), 10-K (reporting date: 2018-12-29).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2022 Calculation
OPM = 100 × NOPBT ÷ Adjusted revenue
= 100 × ÷ =
4 Click competitor name to see calculations.
Profitability ratio | Description | The company |
---|---|---|
OPM | The operating profit margin (OPM) is the ratio of pretax economic earnings, or NOPBT, to sales. | Cadence Design Systems Inc. OPM improved from 2020 to 2021 and from 2021 to 2022. |
Turnover of Capital (TO)
Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 28, 2019 | Dec 29, 2018 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | ||||||
Revenue | ||||||
Add: Increase (decrease) in deferred revenue | ||||||
Adjusted revenue | ||||||
Invested capital1 | ||||||
Efficiency Ratio | ||||||
TO2 | ||||||
Benchmarks | ||||||
TO, Competitors3 | ||||||
Accenture PLC | ||||||
Adobe Inc. | ||||||
International Business Machines Corp. | ||||||
Intuit Inc. | ||||||
Microsoft Corp. | ||||||
Oracle Corp. | ||||||
Palo Alto Networks Inc. | ||||||
Salesforce Inc. | ||||||
ServiceNow Inc. | ||||||
Synopsys Inc. |
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: 2019-12-28), 10-K (reporting date: 2018-12-29).
1 Invested capital. See details »
2 2022 Calculation
TO = Adjusted revenue ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
Efficiency ratio | Description | The company |
---|---|---|
TO | The turnover of capital (TO) is the ratio of sales to invested capital. Capital turnover is a function of the efficiency of working capital management and of net fixed assets. | Cadence Design Systems Inc. TO deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level. |
Effective Cash Tax Rate (CTR)
Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 28, 2019 | Dec 29, 2018 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | ||||||
Net operating profit after taxes (NOPAT)1 | ||||||
Add: Cash operating taxes2 | ||||||
Net operating profit before taxes (NOPBT) | ||||||
Tax Rate | ||||||
CTR3 | ||||||
Benchmarks | ||||||
CTR, Competitors4 | ||||||
Accenture PLC | ||||||
Adobe Inc. | ||||||
International Business Machines Corp. | ||||||
Intuit Inc. | ||||||
Microsoft Corp. | ||||||
Oracle Corp. | ||||||
Palo Alto Networks Inc. | ||||||
Salesforce Inc. | ||||||
ServiceNow Inc. | ||||||
Synopsys Inc. |
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: 2019-12-28), 10-K (reporting date: 2018-12-29).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2022 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × ÷ =
4 Click competitor name to see calculations.
Tax rate | Description | The company |
---|---|---|
CTR | Effective cash tax rate on operating income. | Cadence Design Systems Inc. CTR increased from 2020 to 2021 and from 2021 to 2022. |