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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Linde plc pages available for free this week:
- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2005
- Return on Assets (ROA) since 2005
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Return on Invested Capital (ROIC)
Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Net operating profit after taxes (NOPAT)1 | ||||||
Invested capital2 | ||||||
Performance Ratio | ||||||
ROIC3 | ||||||
Benchmarks | ||||||
ROIC, Competitors4 | ||||||
Sherwin-Williams Co. |
Based on: 10-K (reporting date: 2023-12-31), 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: 2019-12-31).
1 NOPAT. See details »
2 Invested capital. See details »
3 2023 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. | Linde plc ROIC improved from 2021 to 2022 and from 2022 to 2023. |
Decomposition of ROIC
ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
---|---|---|---|---|---|---|---|
Dec 31, 2023 | = | × | × | ||||
Dec 31, 2022 | = | × | × | ||||
Dec 31, 2021 | = | × | × | ||||
Dec 31, 2020 | = | × | × | ||||
Dec 31, 2019 | = | × | × |
Based on: 10-K (reporting date: 2023-12-31), 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: 2019-12-31).
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 increase in return on invested capital (ROIC) over 2023 year is the increase in profitability measured by operating profit margin (OPM) ratio.
Operating Profit Margin (OPM)
Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Net operating profit after taxes (NOPAT)1 | ||||||
Add: Cash operating taxes2 | ||||||
Net operating profit before taxes (NOPBT) | ||||||
Sales | ||||||
Profitability Ratio | ||||||
OPM3 | ||||||
Benchmarks | ||||||
OPM, Competitors4 | ||||||
Sherwin-Williams Co. |
Based on: 10-K (reporting date: 2023-12-31), 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: 2019-12-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2023 Calculation
OPM = 100 × NOPBT ÷ Sales
= 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. | Linde plc OPM deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level. |
Turnover of Capital (TO)
Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Sales | ||||||
Invested capital1 | ||||||
Efficiency Ratio | ||||||
TO2 | ||||||
Benchmarks | ||||||
TO, Competitors3 | ||||||
Sherwin-Williams Co. |
Based on: 10-K (reporting date: 2023-12-31), 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: 2019-12-31).
1 Invested capital. See details »
2 2023 Calculation
TO = Sales ÷ 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. | Linde plc TO improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023. |
Effective Cash Tax Rate (CTR)
Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
---|---|---|---|---|---|---|
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 | ||||||
Sherwin-Williams Co. |
Based on: 10-K (reporting date: 2023-12-31), 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: 2019-12-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2023 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. | Linde plc CTR increased from 2021 to 2022 but then decreased significantly from 2022 to 2023. |