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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Expedia Group Inc. pages available for free this week:
- Income Statement
- Statement of Comprehensive Income
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to EBITDA (EV/EBITDA)
- Dividend Discount Model (DDM)
- Return on Equity (ROE) since 2005
- Current Ratio since 2005
- Analysis of Revenues
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Return on Invested Capital (ROIC)
Expedia Group 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 millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| ROIC3 | ||||||
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| Amazon.com Inc. | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
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 × ÷ =
4 Click competitor name to see calculations.
The financial performance over the analyzed period exhibits noticeable fluctuations in key profitability indicators and capital investment.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT showed a steady increase from 2017 through 2019, rising from 1,026 million USD to 1,922 million USD. This upward trend indicates improved operating performance during these years. However, in 2020, there was a significant decline, with NOPAT falling sharply to a negative 5,503 million USD, signaling substantial operational losses likely due to extraordinary circumstances. By 2021, there was a strong recovery, with NOPAT rebounding to 2,614 million USD, surpassing the 2019 level.
- Invested Capital
- Invested capital exhibited a gradual but consistent increase over the five-year span, moving from 14,039 million USD in 2017 to 17,498 million USD in 2021. This suggests ongoing investments or asset growth, despite the operational challenges seen in 2020.
- Return on Invested Capital (ROIC)
- ROIC trends aligned closely with NOPAT developments. From 2017 to 2019, ROIC improved steadily from 7.31% to 11.89%, reflecting more efficient use of invested capital generating higher returns. In 2020, ROIC turned sharply negative to -34.9%, reflecting the severe impact on profitability relative to capital invested. By 2021, ROIC rebounded strongly to 14.94%, achieving the highest return within the period and indicating a powerful recovery in capital efficiency.
In summary, the data reveal robust growth in operating profit and capital efficiency through 2019, a significant downturn in 2020 indicating operational distress, followed by a pronounced recovery in 2021. Invested capital steadily increased throughout, implying continued commitment to capital deployment despite the volatile profitability environment.
Decomposition of ROIC
Expedia Group Inc., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2021 | = | × | × | ||||
| Dec 31, 2020 | = | × | × | ||||
| Dec 31, 2019 | = | × | × | ||||
| Dec 31, 2018 | = | × | × | ||||
| Dec 31, 2017 | = | × | × |
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 »
- Operating Profit Margin (OPM)
- The operating profit margin exhibited an upward trend from 11.56% in 2017 to 16.78% in 2019, indicating improved operational efficiency during this period. However, there was a drastic decline in 2020 to negative 216.34%, reflecting significant operational challenges or extraordinary losses. The margin recovered strongly in 2021, rising to 24.89%, surpassing previous years' levels and suggesting a robust rebound in profitability.
- Turnover of Capital (TO)
- The turnover of capital ratio showed moderate volatility. It increased from 0.76 in 2017 to 0.86 in 2018, then dipped slightly to 0.83 in 2019. In 2020, there was a substantial drop to 0.16, indicating reduced efficiency in utilizing capital to generate revenue. The ratio partially recovered to 0.64 in 2021 but remained below the pre-2020 figures.
- 1 – Effective Cash Tax Rate (CTR)
- This metric remained relatively high across the years, fluctuating between approximately 75.97% and 100%. The rate was highest in 2020 at 100%, indicating full taxation on effective cash earnings or possibly zero tax shield benefits that year. The rate slightly decreased to 93.99% in 2021 but still reflected substantial tax obligations relative to cash earnings.
- Return on Invested Capital (ROIC)
- The return on invested capital improved steadily from 7.31% in 2017 to 11.89% in 2019, demonstrating increasingly effective use of capital to generate returns. In 2020, ROIC experienced a severe contraction to negative 34.9%, highlighting a period of significant capital inefficiency or losses. Recovery was noted in 2021 with a rise to 14.94%, indicating renewed effective capital deployment and strong profitability relative to invested capital.
Operating Profit Margin (OPM)
Expedia Group 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 millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in deferred merchant bookings and deferred revenue | ||||||
| Adjusted revenue | ||||||
| Profitability Ratio | ||||||
| OPM3 | ||||||
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| Amazon.com Inc. | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
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 × ÷ =
4 Click competitor name to see calculations.
The financial data reveals notable fluctuations in operating performance over the five-year period under review. A detailed examination of the key metrics provides insights into trends and underlying business dynamics.
- Net Operating Profit Before Taxes (NOPBT)
- The NOPBT showed a steady increase from 1,238 million USD in 2017 to a peak of 2,245 million USD in 2019, indicating consistent profitability improvements during this timeframe. However, there was a significant decline in 2020, with NOPBT falling sharply to a negative 5,361 million USD, evidencing a substantial operating loss. In 2021, NOPBT rebounded to 2,781 million USD, surpassing previous highs and suggesting a strong recovery from the prior year's downturn.
- Adjusted Revenue
- Adjusted revenue followed an upward trajectory from 10,705 million USD in 2017 to 13,376 million USD in 2019, reflecting revenue growth in the initial years. This trend was interrupted in 2020, with a drastic decrease to 2,478 million USD, indicative of a significant decline in business volume or demand. By 2021, adjusted revenue recovered considerably to 11,173 million USD, approaching the pre-2020 levels but not fully restoring the peak achieved in 2019.
- Operating Profit Margin (OPM)
- The operating profit margin improved steadily from 11.56% in 2017 to 16.78% in 2019, highlighting enhanced profitability relative to revenue. In 2020, the margin deteriorated drastically to -216.34%, signaling heavy operating losses likely driven by extraordinary circumstances impacting the business. The margin rebounded sharply to 24.89% in 2021, exceeding prior margins and illustrating effective cost management or increased revenue efficiency during the recovery phase.
Overall, the data depicts a pattern of growth and profitability improvement up to 2019, followed by a severe disruption in 2020 with significant revenue and profit declines. The subsequent year shows a marked recovery, with profitability metrics exceeding previous years despite revenue not fully recovering to the 2019 peak. This indicates resilience in operational efficiency post-crisis but suggests continuing challenges in restoring full revenue capacity.
Turnover of Capital (TO)
Expedia Group 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 millions) | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in deferred merchant bookings and deferred revenue | ||||||
| Adjusted revenue | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| Amazon.com Inc. | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
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
= ÷ =
3 Click competitor name to see calculations.
- Revenue Trends
- The adjusted revenue exhibited a growth trend from 2017 to 2019, increasing from 10,705 million US dollars to 13,376 million US dollars. However, there was a significant decline in 2020, with revenue dropping sharply to 2,478 million US dollars. This decline was followed by a recovery in 2021, when revenue rose again to 11,173 million US dollars, although it did not reach the pre-2020 peak levels.
- Invested Capital
- Invested capital has shown a generally increasing trend over the analyzed period. The capital grew from 14,039 million US dollars in 2017 to 16,161 million US dollars in 2019, followed by a slight decrease in 2020 to 15,765 million US dollars. In 2021, invested capital increased substantially to 17,498 million US dollars, reaching the highest value in the period under consideration.
- Turnover of Capital (TO)
- The turnover of capital ratio initially improved from 0.76 in 2017 to 0.86 in 2018 before declining slightly to 0.83 in 2019. A sharp decrease was observed in 2020, plunging to 0.16, which coincides with the significant reduction in revenue during the same year. In 2021, the turnover improved to 0.64, indicating a partial recovery, yet still below the levels observed before 2020.
- Overall Insights
- The data reveal a strong impact in 2020, likely reflecting external challenges that led to a significant dip in revenue and efficiency in capital use. Despite this, invested capital was maintained at a high level, suggesting a strategic stance to support recovery. The recovery trend in both revenue and turnover of capital in 2021 indicates an improvement in operational performance and asset utilization, though not yet fully restored to the pre-2020 standards.
Effective Cash Tax Rate (CTR)
Expedia Group 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 millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Tax Rate | ||||||
| CTR3 | ||||||
| Benchmarks | ||||||
| CTR, Competitors4 | ||||||
| Amazon.com Inc. | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
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 × ÷ =
4 Click competitor name to see calculations.
- Cash Operating Taxes
- The cash operating taxes showed an increasing trend from 2017 to 2018, rising from 212 million USD to 427 million USD. This was followed by a slight decline in 2019 to 323 million USD, a more significant drop in 2020 to 142 million USD, and then a moderate increase to 167 million USD in 2021. Overall, there is noticeable volatility, with a peak in 2018 and a trough in 2020.
- Net Operating Profit Before Taxes (NOPBT)
- The NOPBT exhibited growth from 2017 through 2019, increasing from 1,238 million USD to 2,245 million USD. However, there was a sharp reversal in 2020, with a substantial loss of 5,361 million USD, indicating a significant operational challenge or extraordinary event during that year. In 2021, the company recovered to a positive figure of 2,781 million USD, surpassing previous years' profits. This pattern reflects a period of growth, a severe downturn, and a strong recovery.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate rose from 17.1% in 2017 to 24.03% in 2018, then declined to 14.38% in 2019. Data for 2020 is missing, likely due to the negative operating profit for that year, which would affect tax calculations. In 2021, the tax rate was notably low at 6.01%, potentially reflecting favorable tax treatments or lower taxable income despite the return to profitability.