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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- Analysis of Geographic Areas
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Selected Financial Data since 2008
- Net Profit Margin since 2008
- Operating Profit Margin since 2008
- Return on Equity (ROE) since 2008
- Price to Operating Profit (P/OP) since 2008
- Price to Sales (P/S) since 2008
- Aggregate Accruals
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Return on Invested Capital (ROIC)
Keurig Dr Pepper Inc., ROIC calculation, comparison to benchmarks
| 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 | |||||
| Invested capital2 | |||||
| Performance Ratio | |||||
| ROIC3 | |||||
| Benchmarks | |||||
| ROIC, Competitors4 | |||||
| Coca-Cola Co. | |||||
| Mondelēz International Inc. | |||||
| PepsiCo Inc. | |||||
| Philip Morris International 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).
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.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT shows a consistent upward trend from 2018 through 2021. Starting at 903 million USD in 2018, it nearly doubled to 1753 million USD in 2019. The value slightly increased to 1786 million USD in 2020 and then experienced a significant rise to 2588 million USD in 2021. This progression indicates improved operational profitability over the analyzed periods.
- Invested Capital
- The invested capital remained relatively stable across the four years, starting at 44,635 million USD in 2018 and fluctuating slightly around this range with 44,138 million USD in 2019, a slight decrease to 43,835 million USD in 2020, and a moderate increase to 44,109 million USD in 2021. This steadiness suggests no substantial changes in capital investment levels during the period.
- Return on Invested Capital (ROIC)
- ROIC exhibited a positive and steady improvement over the four years. It rose from 2.02% in 2018 to 3.97% in 2019, showing near doubling in efficiency. The upward trend continued with 4.08% in 2020 and then more substantially to 5.87% in 2021. This indicates increasing effectiveness in generating returns from the invested capital throughout the period.
- Summary
- Overall, the data reveal a strengthening profitability and return performance despite a relatively constant investment base. The significant increase in NOPAT coupled with stable invested capital resulted in a notable improvement in ROIC, highlighting enhanced capital efficiency and operational effectiveness over the analyzed years.
Decomposition of ROIC
Keurig Dr Pepper Inc., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2021 | = | × | × | ||||
| Dec 31, 2020 | = | × | × | ||||
| Dec 31, 2019 | = | × | × | ||||
| Dec 31, 2018 | = | × | × |
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).
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 exhibits an overall increasing trend over the four-year period. Starting at 17.26% in 2018, it rises significantly to 21.2% in 2019. Although there is a slight decline to 20.64% in 2020, the margin recovers strongly in 2021, reaching its highest point at 26.19%. This indicates improving operational efficiency and profitability.
- Turnover of Capital (TO)
- The turnover of capital shows consistent growth each year. It increases from 0.17 in 2018 to 0.25 in 2019, then to 0.27 in 2020, and further to 0.29 in 2021. This suggests enhanced effectiveness in utilizing capital to generate revenue over the observed period.
- 1 – Effective Cash Tax Rate (CTR)
- The metric 1 – effective cash tax rate displays a steady upward trend from 70.32% in 2018 to 77.93% in 2021. This implies that the effective cash tax rate has been increasing, potentially reflecting higher tax liabilities or reduced tax benefits over time.
- Return on Invested Capital (ROIC)
- The return on invested capital improves markedly during the period analyzed. It starts at a low level of 2.02% in 2018, nearly doubles to 3.97% in 2019, and continues rising gradually to 4.08% in 2020. In 2021, there is a significant increase to 5.87%, indicating better returns generated from the capital invested in the business.
Operating Profit Margin (OPM)
Keurig Dr Pepper Inc., OPM calculation, comparison to benchmarks
| 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 | |||||
| Add: Cash operating taxes2 | |||||
| Net operating profit before taxes (NOPBT) | |||||
| Net sales | |||||
| Profitability Ratio | |||||
| OPM3 | |||||
| Benchmarks | |||||
| OPM, Competitors4 | |||||
| Coca-Cola Co. | |||||
| Mondelēz International Inc. | |||||
| PepsiCo Inc. | |||||
| Philip Morris International 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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2021 Calculation
OPM = 100 × NOPBT ÷ Net sales
= 100 × ÷ =
4 Click competitor name to see calculations.
- Net Operating Profit Before Taxes (NOPBT)
- The net operating profit before taxes exhibited a consistent upward trend over the four-year period. Starting at 1,284 million US dollars in 2018, it nearly doubled to 2,358 million in 2019, showing significant growth. The figure continued to rise to 2,398 million in 2020 and increased more sharply to 3,321 million by the end of 2021. This indicates effective cost management and/or revenue growth contributing to higher profitability before taxes.
- Net Sales
- Net sales showed a steady increase each year, beginning at 7,442 million US dollars in 2018. Sales surged substantially to 11,120 million in 2019, followed by a moderate rise to 11,618 million in 2020, and further growth to 12,683 million in 2021. The considerable jump from 2018 to 2019 suggests expansion or successful market penetration, while the continued growth reflects ongoing positive sales momentum.
- Operating Profit Margin (OPM)
- The operating profit margin improved markedly over the period analyzed. From 17.26% in 2018, it rose to 21.2% in 2019, suggesting enhanced operating efficiency or better cost controls. There was a slight decline to 20.64% in 2020, which may indicate marginally increased operating costs or pricing pressures during that year. However, the margin recovered strongly to reach 26.19% in 2021, indicating an overall improvement in profitability relative to sales.
- Summary of Trends
- Financial performance exhibited robust growth across all measured dimensions. Net sales and net operating profit before taxes both followed upward trajectories, implying successful strategic initiatives and favorable market conditions. The operating profit margin's fluctuation, with a minor dip in 2020, is noteworthy but the significant increase in 2021 underlines improving operational leverage. These trends collectively reflect strengthening financial health and operational effectiveness over the four-year timeframe.
Turnover of Capital (TO)
Keurig Dr Pepper Inc., TO calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net sales | |||||
| Invested capital1 | |||||
| Efficiency Ratio | |||||
| TO2 | |||||
| Benchmarks | |||||
| TO, Competitors3 | |||||
| Coca-Cola Co. | |||||
| Mondelēz International Inc. | |||||
| PepsiCo Inc. | |||||
| Philip Morris International 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).
1 Invested capital. See details »
2 2021 Calculation
TO = Net sales ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
- Net Sales
- The net sales of the company demonstrate a consistent upward trend over the four-year period. Starting at $7,442 million in 2018, net sales increased significantly to $11,120 million in 2019, representing a substantial growth. This positive trend continued with moderate increments in 2020 and 2021, reaching $11,618 million and $12,683 million respectively. Overall, net sales rose by approximately 70.5% from 2018 to 2021, indicating strong revenue growth.
- Invested Capital
- Invested capital showed relative stability throughout the period. The values fluctuated slightly, starting at $44,635 million in 2018, decreasing marginally to $44,138 million in 2019, then to $43,835 million in 2020, and slightly increasing again to $44,109 million in 2021. These small variations suggest that the company maintained a relatively consistent level of capital investment during these years without significant expansion or reduction.
- Turnover of Capital (TO)
- The turnover of capital ratio displays a consistent improvement, rising from 0.17 in 2018 to 0.29 in 2021. This indicates increasing efficiency in the use of invested capital to generate sales. The ratio improved steadily each year, with notable gains between 2018 and 2019 and continued positive momentum through 2021. The growth in turnover of capital suggests enhanced operational effectiveness in utilizing assets to drive revenue growth.
- Overall Analysis
- The data portrays a company experiencing solid revenue growth alongside stable capital investment. The steady increase in turnover of capital highlights improved asset utilization efficiency, which complements the rising net sales figures. The combination of rising sales and a stable invested capital base suggests effective management of resources to support business growth without excessive capital expenditures.
Effective Cash Tax Rate (CTR)
Keurig Dr Pepper Inc., CTR calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net operating profit after taxes (NOPAT)1 | |||||
| Add: Cash operating taxes2 | |||||
| Net operating profit before taxes (NOPBT) | |||||
| Tax Rate | |||||
| CTR3 | |||||
| Benchmarks | |||||
| CTR, Competitors4 | |||||
| Coca-Cola Co. | |||||
| Mondelēz International Inc. | |||||
| PepsiCo Inc. | |||||
| Philip Morris International 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).
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 exhibit a consistent upward trend over the analyzed period, increasing from $381 million in 2018 to $733 million in 2021. This represents nearly a doubling of cash taxes paid, indicating either higher taxable income or changes in tax obligations.
- Net Operating Profit Before Taxes (NOPBT)
- The NOPBT shows a strong growth trajectory, rising from $1,284 million in 2018 to $3,321 million in 2021. This more than doubles the operating profitability before tax over the four years, reflecting improved operational performance or increased revenue generation.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate demonstrates a declining trend, decreasing from 29.68% in 2018 to 22.07% in 2021. This reduction in tax rate suggests enhanced tax efficiency or utilization of tax planning strategies that have reduced the effective tax burden relative to profits.
- Overall Trends and Insights
- Despite the substantial increase in net operating profit before taxes and cash operating taxes paid, the effective cash tax rate has decreased consistently. This disparity indicates that while the absolute tax payments have increased, the proportion of taxes relative to operating profits has declined. Such a pattern suggests the company achieved greater profitability alongside more favorable tax conditions or management strategies to reduce tax liabilities over time.