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)
Kraft Foods Group Inc., ROIC calculation, comparison to benchmarks
| Dec 27, 2014 | Dec 28, 2013 | Dec 29, 2012 | ||
|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||
| Net operating profit after taxes (NOPAT)1 | 989) | 3,734) | 2,340) | |
| Invested capital2 | 14,787) | 16,041) | 13,807) | |
| Performance Ratio | ||||
| ROIC3 | 6.69% | 23.28% | 16.95% | |
| Benchmarks | ||||
| ROIC, Competitors4 | ||||
| lululemon athletica inc. | — | — | — | |
| Nike Inc. | — | — | — | |
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
1 NOPAT. See details »
2 Invested capital. See details »
3 2014 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 989 ÷ 14,787 = 6.69%
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. | Kraft Foods Group Inc. ROIC improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014. |
Decomposition of ROIC
Kraft Foods Group Inc., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Dec 27, 2014 | 6.69% | = | 10.37% | × | 1.23 | × | 52.37% |
| Dec 28, 2013 | 23.28% | = | 25.16% | × | 1.14 | × | 81.47% |
| Dec 29, 2012 | 16.95% | = | 15.15% | × | 1.33 | × | 84.25% |
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
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 2014 year is the decrease in profitability measured by operating profit margin (OPM) ratio.
Operating Profit Margin (OPM)
Kraft Foods Group Inc., OPM calculation, comparison to benchmarks
| Dec 27, 2014 | Dec 28, 2013 | Dec 29, 2012 | ||
|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||
| Net operating profit after taxes (NOPAT)1 | 989) | 3,734) | 2,340) | |
| Add: Cash operating taxes2 | 899) | 849) | 437) | |
| Net operating profit before taxes (NOPBT) | 1,888) | 4,584) | 2,778) | |
| Net revenues | 18,205) | 18,218) | 18,339) | |
| Profitability Ratio | ||||
| OPM3 | 10.37% | 25.16% | 15.15% | |
| Benchmarks | ||||
| OPM, Competitors4 | ||||
| lululemon athletica inc. | — | — | — | |
| Nike Inc. | — | — | — | |
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2014 Calculation
OPM = 100 × NOPBT ÷ Net revenues
= 100 × 1,888 ÷ 18,205 = 10.37%
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. | Kraft Foods Group Inc. OPM improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014. |
Turnover of Capital (TO)
Kraft Foods Group Inc., TO calculation, comparison to benchmarks
| Dec 27, 2014 | Dec 28, 2013 | Dec 29, 2012 | ||
|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||
| Net revenues | 18,205) | 18,218) | 18,339) | |
| Invested capital1 | 14,787) | 16,041) | 13,807) | |
| Efficiency Ratio | ||||
| TO2 | 1.23 | 1.14 | 1.33 | |
| Benchmarks | ||||
| TO, Competitors3 | ||||
| lululemon athletica inc. | — | — | — | |
| Nike Inc. | — | — | — | |
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
1 Invested capital. See details »
2 2014 Calculation
TO = Net revenues ÷ Invested capital
= 18,205 ÷ 14,787 = 1.23
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. | Kraft Foods Group Inc. TO deteriorated from 2012 to 2013 but then slightly improved from 2013 to 2014. |
Effective Cash Tax Rate (CTR)
Kraft Foods Group Inc., CTR calculation, comparison to benchmarks
| Dec 27, 2014 | Dec 28, 2013 | Dec 29, 2012 | ||
|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||
| Net operating profit after taxes (NOPAT)1 | 989) | 3,734) | 2,340) | |
| Add: Cash operating taxes2 | 899) | 849) | 437) | |
| Net operating profit before taxes (NOPBT) | 1,888) | 4,584) | 2,778) | |
| Tax Rate | ||||
| CTR3 | 47.63% | 18.53% | 15.75% | |
| Benchmarks | ||||
| CTR, Competitors4 | ||||
| lululemon athletica inc. | — | — | — | |
| Nike Inc. | — | — | — | |
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2014 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 899 ÷ 1,888 = 47.63%
4 Click competitor name to see calculations.
| Tax rate | Description | The company |
|---|---|---|
| CTR | Effective cash tax rate on operating income. | Kraft Foods Group Inc. CTR increased from 2012 to 2013 and from 2013 to 2014. |