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)
Etsy Inc., ROIC calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net operating profit after taxes (NOPAT)1 | 413,095) | 393,749) | 103,763) | 76,568) | 47,642) | |
| Invested capital2 | 2,842,921) | 1,488,547) | 888,183) | 536,522) | 498,789) | |
| Performance Ratio | ||||||
| ROIC3 | 14.53% | 26.45% | 11.68% | 14.27% | 9.55% | |
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| Amazon.com Inc. | 18.50% | 16.11% | 12.59% | — | — | |
| Home Depot Inc. | 28.36% | 35.06% | 35.92% | — | — | |
| Lowe’s Cos. Inc. | 24.73% | 19.08% | 11.47% | — | — | |
| TJX Cos. Inc. | 1.20% | 18.89% | 18.37% | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 NOPAT. See details »
2 Invested capital. See details »
3 2021 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 413,095 ÷ 2,842,921 = 14.53%
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. | Etsy Inc. ROIC improved from 2019 to 2020 but then slightly deteriorated from 2020 to 2021 not reaching 2019 level. |
Decomposition of ROIC
Etsy Inc., decomposition of ROIC
Based on: 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), 10-K (reporting date: 2017-12-31).
1 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
The primary reason for the decrease in return on invested capital (ROIC) over 2021 year is the decrease in efficiency measured by turnover of capital (TO) ratio.
Operating Profit Margin (OPM)
Etsy Inc., OPM calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net operating profit after taxes (NOPAT)1 | 413,095) | 393,749) | 103,763) | 76,568) | 47,642) | |
| Add: Cash operating taxes2 | 69,622) | 23,282) | 2,782) | 5,774) | (1,409) | |
| Net operating profit before taxes (NOPBT) | 482,717) | 417,030) | 106,545) | 82,342) | 46,232) | |
| Revenue | 2,329,114) | 1,725,625) | 818,379) | 603,693) | 441,231) | |
| Add: Increase (decrease) in deferred revenue | 1,075) | 3,647) | 139) | 1,216) | 614) | |
| Adjusted revenue | 2,330,189) | 1,729,272) | 818,518) | 604,909) | 441,845) | |
| Profitability Ratio | ||||||
| OPM3 | 20.72% | 24.12% | 13.02% | 13.61% | 10.46% | |
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| Amazon.com Inc. | 9.14% | 7.23% | 6.37% | — | — | |
| Home Depot Inc. | 14.46% | 14.86% | 14.78% | — | — | |
| Lowe’s Cos. Inc. | 10.29% | 8.99% | 5.96% | — | — | |
| TJX Cos. Inc. | 1.83% | 11.34% | 11.40% | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2021 Calculation
OPM = 100 × NOPBT ÷ Adjusted revenue
= 100 × 482,717 ÷ 2,330,189 = 20.72%
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. | Etsy Inc. OPM improved from 2019 to 2020 but then slightly deteriorated from 2020 to 2021. |
Turnover of Capital (TO)
Etsy Inc., TO calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue | 2,329,114) | 1,725,625) | 818,379) | 603,693) | 441,231) | |
| Add: Increase (decrease) in deferred revenue | 1,075) | 3,647) | 139) | 1,216) | 614) | |
| Adjusted revenue | 2,330,189) | 1,729,272) | 818,518) | 604,909) | 441,845) | |
| Invested capital1 | 2,842,921) | 1,488,547) | 888,183) | 536,522) | 498,789) | |
| Efficiency Ratio | ||||||
| TO2 | 0.82 | 1.16 | 0.92 | 1.13 | 0.89 | |
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| Amazon.com Inc. | 2.33 | 2.58 | 2.21 | — | — | |
| Home Depot Inc. | 2.66 | 3.01 | 3.17 | — | — | |
| Lowe’s Cos. Inc. | 3.16 | 2.70 | 2.90 | — | — | |
| TJX Cos. Inc. | 1.44 | 2.23 | 2.24 | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 Invested capital. See details »
2 2021 Calculation
TO = Adjusted revenue ÷ Invested capital
= 2,330,189 ÷ 2,842,921 = 0.82
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. | Etsy Inc. TO improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021. |
Effective Cash Tax Rate (CTR)
Etsy Inc., CTR calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net operating profit after taxes (NOPAT)1 | 413,095) | 393,749) | 103,763) | 76,568) | 47,642) | |
| Add: Cash operating taxes2 | 69,622) | 23,282) | 2,782) | 5,774) | (1,409) | |
| Net operating profit before taxes (NOPBT) | 482,717) | 417,030) | 106,545) | 82,342) | 46,232) | |
| Tax Rate | ||||||
| CTR3 | 14.42% | 5.58% | 2.61% | 7.01% | -3.05% | |
| Benchmarks | ||||||
| CTR, Competitors4 | ||||||
| Amazon.com Inc. | 13.08% | 13.72% | 10.59% | — | — | |
| Home Depot Inc. | 26.23% | 21.74% | 23.25% | — | — | |
| Lowe’s Cos. Inc. | 23.91% | 21.38% | 33.62% | — | — | |
| TJX Cos. Inc. | 54.29% | 25.32% | 28.10% | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2021 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 69,622 ÷ 482,717 = 14.42%
4 Click competitor name to see calculations.
| Tax rate | Description | The company |
|---|---|---|
| CTR | Effective cash tax rate on operating income. | Etsy Inc. CTR increased from 2019 to 2020 and from 2020 to 2021. |