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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- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Current Ratio since 2012
- Total Asset Turnover since 2012
- Price to Operating Profit (P/OP) since 2012
- Analysis of Revenues
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Return on Invested Capital (ROIC)
Meta Platforms Inc., ROIC calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| ROIC3 | ||||||
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 NOPAT. See details »
2 Invested capital. See details »
3 2024 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Net Operating Profit After Taxes (NOPAT)
-
The net operating profit after taxes exhibits a fluctuating trend over the observed period. It increased significantly from 27,980 million USD in 2020 to 40,147 million USD in 2021, representing strong operational performance. However, in 2022, there was a noticeable decline to 20,828 million USD. Subsequently, NOPAT recovered in 2023, reaching 38,290 million USD, and further increased to 56,844 million USD by the end of 2024, indicating a strong rebound and growth in profitability.
- Invested Capital
-
Invested capital shows a consistent growth trend throughout the period. It rose from 80,951 million USD in 2020 to 92,809 million USD in 2021, continuing upward to 101,764 million USD in 2022. The growth rate accelerated in the subsequent years, with invested capital reaching 141,324 million USD in 2023 and further increasing to 165,969 million USD by 2024. This indicates sustained investment in the company’s capital base over time.
- Return on Invested Capital (ROIC)
-
ROIC demonstrates considerable variability, reflecting changes in both profitability and capital deployment. It reached a peak of 43.26% in 2021, up from 34.56% in 2020. This was followed by a substantial decrease to 20.47% in 2022. The ratio improved again to 27.09% in 2023 and further increased to 34.25% in 2024. Although ROIC did not maintain its peak level, the recovery in the last two years signals improving efficiency in generating returns from invested capital after the 2022 downturn.
Decomposition of ROIC
Meta Platforms Inc., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2024 | = | × | × | ||||
| Dec 31, 2023 | = | × | × | ||||
| Dec 31, 2022 | = | × | × | ||||
| Dec 31, 2021 | = | × | × | ||||
| Dec 31, 2020 | = | × | × |
Based on: 10-K (reporting date: 2024-12-31), 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).
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 notable fluctuations over the observed period. Starting at 38.27% in 2020, it increased to a peak of 40.15% in 2021, followed by a significant decline to 25.55% in 2022. Thereafter, it recovered progressively, reaching 34.35% in 2023 and further improving to 42.33% in 2024. This trend suggests periods of varying operational efficiency, with a marked dip in 2022 but a strong rebound in the subsequent years.
- Turnover of Capital (TO)
- The turnover of capital ratio demonstrated a general downward trend throughout the period. Starting from 1.06 in 2020, it rose slightly to 1.27 in 2021, then decreased steadily to 1.15 in 2022, 0.96 in 2023, and 0.99 in 2024. The decline indicates a reduction in the efficiency with which the company utilized its capital to generate sales, particularly after 2021.
- 1 – Effective Cash Tax Rate (CTR)
- This metric showed variability but remained relatively high. It began at 84.94% in 2020, slightly decreased to 84.63% in 2021, and dropped more substantially to 69.94% in 2022. However, it rose again to 82.55% in 2023 and slightly decreased to 81.59% in 2024. The observed fluctuations imply underlying changes in the effective tax burden, with 2022 representing a temporary easing of cash tax obligations.
- Return on Invested Capital (ROIC)
- ROIC demonstrated significant volatility. The ratio increased from 34.56% in 2020 to a high of 43.26% in 2021, then experienced a pronounced decline to 20.47% in 2022. Recovery ensued over the next two years, with an increase to 27.09% in 2023 and a further rise to 34.25% in 2024. This pattern mirrors the fluctuations in operating efficiency and suggests the company faced challenges in maintaining returns on invested capital during 2022 but managed to improve performance afterward.
Operating Profit Margin (OPM)
Meta Platforms Inc., OPM calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| 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 revenue | ||||||
| Adjusted revenue | ||||||
| Profitability Ratio | ||||||
| OPM3 | ||||||
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2024 Calculation
OPM = 100 × NOPBT ÷ Adjusted revenue
= 100 × ÷ =
4 Click competitor name to see calculations.
- Net Operating Profit Before Taxes (NOPBT)
- The NOPBT experienced notable fluctuations over the analyzed period. It increased significantly from 32,939 million USD in 2020 to 47,436 million USD in 2021, reflecting strong profit growth. However, in 2022, there was a marked decline to 29,778 million USD. This was followed by a substantial rebound in 2023, with NOPBT rising to 46,385 million USD, and further increasing to 69,671 million USD in 2024, reaching its highest point in the period. This pattern suggests volatility but a generally upward trend in profitability before taxes.
- Adjusted Revenue
- Adjusted revenue showed a steady increase across the years examined. Starting at 86,066 million USD in 2020, revenue rose sharply to 118,154 million USD in 2021. It held relatively stable in 2022 with a slight decrease to 116,539 million USD. In 2023, revenue climbed again to 135,051 million USD, followed by another significant increase to 164,598 million USD in 2024. This consistent growth in revenue indicates an expanding business scale and sales capacity.
- Operating Profit Margin (OPM)
- The operating profit margin percentage demonstrated considerable variability. Initially, it improved from 38.27% in 2020 to a peak of 40.15% in 2021, correlating with the rise in profitability. In 2022, OPM fell sharply to 25.55%, mirroring the decline in NOPBT despite stable revenue. The margin recovered to 34.35% in 2023 and increased further to 42.33% in 2024, the highest margin within the timeframe, indicating improved operational efficiency and profitability relative to revenue by the end of the period.
- Overall Insights
- The data reveals an underlying growth trajectory in adjusted revenue with some volatility in profit-related metrics, particularly in 2022. The decline in NOPBT and OPM in 2022 suggests challenges such as increased costs or unusual expenses impacting profitability despite stable revenues. The strong rebound in 2023 and 2024 highlights effective management of cost structure and operational improvements. By 2024, profitability on both absolute and margin bases reached peak levels in the period, suggesting strengthened financial performance and operational efficiency.
Turnover of Capital (TO)
Meta Platforms Inc., TO calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenue | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 Invested capital. See details »
2 2024 Calculation
TO = Adjusted revenue ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
- Revenue Trends
- The adjusted revenue exhibited an overall upward trend across the five-year period. Starting at $86,066 million in 2020, it increased significantly to $118,154 million in 2021. A slight decline occurred in 2022, with revenue falling to $116,539 million. Subsequently, revenue rebounded and grew to $135,051 million by 2023, followed by a notable rise to $164,598 million in 2024. This demonstrates strong growth momentum especially in the later years.
- Invested Capital Trends
- Invested capital consistently increased throughout the timeframe. Beginning at $80,951 million in 2020, it rose steadily each year: $92,809 million in 2021, $101,764 million in 2022, reaching $141,324 million in 2023, and $165,969 million in 2024. This indicates continued investment and asset buildup to support business operations and expansion.
- Turnover of Capital (TO)
- The turnover of capital ratio, which measures how efficiently the invested capital is utilized to generate revenue, showed some fluctuations. Starting at 1.06 in 2020, it improved notably to 1.27 in 2021, reflecting enhanced capital efficiency. However, the ratio declined to 1.15 in 2022 and further dropped below 1.0 to 0.96 in 2023, suggesting diminishing efficiency in revenue generation relative to invested capital. A slight recovery to 0.99 occurred in 2024 but remained below the levels seen earlier in the period.
- Overall Insights
- The data indicate robust revenue growth supported by increasing invested capital. However, the decline in capital turnover ratio in recent years suggests that while more capital is being deployed, the efficiency of this capital in generating revenue has weakened somewhat. This could point to potential challenges in optimizing asset usage or diminishing returns on incremental investments. Monitoring this ratio going forward will be critical to ensure sustainable growth and capital productivity.
Effective Cash Tax Rate (CTR)
Meta Platforms Inc., CTR calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2024 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × ÷ =
4 Click competitor name to see calculations.
- Cash Operating Taxes
- The cash operating taxes exhibit a generally upward trend over the analyzed periods. Starting from 4,959 million USD at the end of 2020, the figure increased significantly to 7,290 million USD by the end of 2021. This growth continued into 2022, where cash operating taxes rose further to 8,950 million USD. A slight decrease occurred in 2023, with taxes amounting to 8,095 million USD. However, by the end of 2024, the value surged markedly to 12,827 million USD, indicating a sharp increase in the latest period.
- Net Operating Profit Before Taxes (NOPBT)
- Net operating profit before taxes shows considerable fluctuations over the examined timeline. It started at 32,939 million USD in 2020, followed by a significant rise to 47,436 million USD in 2021. Thereafter, a decline is observed in 2022, with NOPBT falling to 29,778 million USD. This was followed by a recovery in 2023, reaching 46,385 million USD. The upward trajectory continued in 2024, with NOPBT reaching the highest point of the period at 69,671 million USD.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate displays variability across the years. Starting at 15.06% in 2020, the tax rate increased slightly to 15.37% in 2021. However, in 2022, the tax rate doubled to 30.06%, indicating an unusually high tax burden during this year. In subsequent years, the CTR decreased to 17.45% in 2023 and marginally increased to 18.41% in 2024, returning closer to the lower tax rates observed earlier in the period.
In summary, the data reflects increasing cash tax payments, especially notable in 2024, alongside a fluctuating but generally upward trend in operating profits, which peaked in the final year. The effective cash tax rate exhibited volatility, with a pronounced spike in 2022 which then moderated in the following years. These patterns suggest operational profitability has strengthened in recent years, albeit with varying tax cost implications.