Stock Analysis on Net

Meta Platforms Inc. (NASDAQ:META)

Return on Capital (ROC)

Microsoft Excel

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)

Meta Platforms Inc., ROIC calculation, comparison to benchmarks

Microsoft Excel
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 38,290 20,828 40,147 27,980 18,109
Invested capital2 141,324 101,764 92,809 80,951 65,543
Performance Ratio
ROIC3 27.09% 20.47% 43.26% 34.56% 27.63%
Benchmarks
ROIC, Competitors4
Alphabet Inc. 33.24% 30.10% 52.45% 33.62% 32.72%
Charter Communications Inc. 7.02% 7.38% 7.13% 5.44% 3.89%
Comcast Corp. 7.80% 3.20% 8.38% 6.52% 8.40%
Netflix Inc. 14.92% 13.33% 17.47% 12.41% 10.33%
Walt Disney Co. 1.96% 3.85% 1.28% -1.18% 9.58%

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 × 38,290 ÷ 141,324 = 27.09%

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. Meta Platforms Inc. ROIC deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.

Decomposition of ROIC

Meta Platforms Inc., decomposition of ROIC

Microsoft Excel
ROIC = OPM1 × TO2 × 1 – CTR3
Dec 31, 2023 27.09% = 34.35% × 0.96 × 82.55%
Dec 31, 2022 20.47% = 25.55% × 1.15 × 69.94%
Dec 31, 2021 43.26% = 40.15% × 1.27 × 84.63%
Dec 31, 2020 34.56% = 38.27% × 1.06 × 84.94%
Dec 31, 2019 27.63% = 34.39% × 1.08 × 74.35%

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)

Meta Platforms Inc., OPM calculation, comparison to benchmarks

Microsoft Excel
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 38,290 20,828 40,147 27,980 18,109
Add: Cash operating taxes2 8,095 8,950 7,290 4,959 6,247
Net operating profit before taxes (NOPBT) 46,385 29,778 47,436 32,939 24,355
 
Revenue 134,902 116,609 117,929 85,965 70,697
Add: Increase (decrease) in deferred revenue 149 (70) 225 101 117
Adjusted revenue 135,051 116,539 118,154 86,066 70,814
Profitability Ratio
OPM3 34.35% 25.55% 40.15% 38.27% 34.39%
Benchmarks
OPM, Competitors4
Alphabet Inc. 26.55% 25.43% 34.97% 25.81% 23.20%
Charter Communications Inc. 22.26% 22.53% 20.18% 17.10% 13.71%
Comcast Corp. 20.88% 10.68% 20.21% 18.80% 20.42%
Netflix Inc. 21.13% 19.29% 22.76% 16.83% 14.43%
Walt Disney Co. 7.31% 10.16% 5.56% -1.10% 24.76%

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 ÷ Adjusted revenue
= 100 × 46,385 ÷ 135,051 = 34.35%

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. Meta Platforms Inc. OPM deteriorated from 2021 to 2022 but then improved from 2022 to 2023 not reaching 2021 level.

Turnover of Capital (TO)

Meta Platforms Inc., TO calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Revenue 134,902 116,609 117,929 85,965 70,697
Add: Increase (decrease) in deferred revenue 149 (70) 225 101 117
Adjusted revenue 135,051 116,539 118,154 86,066 70,814
 
Invested capital1 141,324 101,764 92,809 80,951 65,543
Efficiency Ratio
TO2 0.96 1.15 1.27 1.06 1.08
Benchmarks
TO, Competitors3
Alphabet Inc. 1.62 1.62 1.74 1.49 1.61
Charter Communications Inc. 0.41 0.41 0.39 0.36 0.33
Comcast Corp. 0.58 0.57 0.51 0.46 0.50
Netflix Inc. 0.89 0.84 0.86 0.85 0.84
Walt Disney Co. 0.51 0.49 0.39 0.37 0.42

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 = Adjusted revenue ÷ Invested capital
= 135,051 ÷ 141,324 = 0.96

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. Meta Platforms Inc. TO deteriorated from 2021 to 2022 and from 2022 to 2023.

Effective Cash Tax Rate (CTR)

Meta Platforms Inc., CTR calculation, comparison to benchmarks

Microsoft Excel
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 38,290 20,828 40,147 27,980 18,109
Add: Cash operating taxes2 8,095 8,950 7,290 4,959 6,247
Net operating profit before taxes (NOPBT) 46,385 29,778 47,436 32,939 24,355
Tax Rate
CTR3 17.45% 30.06% 15.37% 15.06% 25.65%
Benchmarks
CTR, Competitors4
Alphabet Inc. 22.86% 27.09% 13.97% 12.78% 12.46%
Charter Communications Inc. 22.84% 20.47% 10.54% 11.92% 14.79%
Comcast Corp. 35.33% 47.01% 18.38% 25.15% 18.36%
Netflix Inc. 21.00% 17.55% 10.36% 12.87% 14.95%
Walt Disney Co. 47.64% 22.01% 41.25% 7.41%

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 × 8,095 ÷ 46,385 = 17.45%

4 Click competitor name to see calculations.

Tax rate Description The company
CTR Effective cash tax rate on operating income. Meta Platforms Inc. CTR increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.