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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- Statement of Comprehensive Income
- Cash Flow Statement
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Net Profit Margin since 2010
- Return on Equity (ROE) since 2010
- Total Asset Turnover since 2010
- Price to Earnings (P/E) since 2010
- Price to Operating Profit (P/OP) since 2010
- Price to Book Value (P/BV) since 2010
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Return on Invested Capital (ROIC)
NXP Semiconductors N.V., ROIC calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| ROIC3 | ||||||
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| Monolithic Power Systems Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
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 net operating profit after taxes exhibited significant fluctuation over the observed periods. Initially, NOPAT increased from 1630 million US dollars in 2017 to 2196 million in 2018, indicating a strong upward trend. However, in the following years, a sharp decline was evident, dropping to 303 million in 2019 and further down to 40 million in 2020. This marked reduction suggests operational challenges or extraordinary factors affecting profitability. In 2021, the figure rebounded substantially to 2126 million, nearly returning to the levels observed in 2018, reflecting a recovery phase.
- Invested Capital
- Invested capital showed a general declining trend over the five-year period. The capital base decreased steadily from 20,519 million US dollars in 2017 to 16,335 million in 2020. A slight increase was observed in 2021, rising to 16,745 million. This gradual reduction may imply asset divestitures, efficiency improvements, or reduced investment in long-term assets.
- Return on Invested Capital (ROIC)
- The return on invested capital followed a pattern similar to that of NOPAT, with notable volatility. ROIC increased from 7.94% in 2017 to 12.2% in 2018, indicating enhanced profitability relative to the capital employed. However, a steep decline followed, with ROIC reaching a low of 0.25% in 2020, mirroring the drop in NOPAT and suggesting poor returns on the capital base during this period. By 2021, ROIC improved significantly to 12.7%, surpassing earlier years and signaling an effective recovery in operational efficiency and capital utilization.
Decomposition of ROIC
NXP Semiconductors N.V., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2021 | = | × | × | ||||
| Dec 31, 2020 | = | × | × | ||||
| Dec 31, 2019 | = | × | × | ||||
| Dec 31, 2018 | = | × | × | ||||
| Dec 31, 2017 | = | × | × |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
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 experienced notable fluctuations over the analyzed period. It peaked at 28.07% in 2018, followed by a sharp decline to a low of 4.59% in 2020. Subsequently, it rebounded significantly in 2021 to 22.69%, approaching levels seen earlier in the period. This pattern indicates a period of volatility with a strong recovery in the most recent year.
- Turnover of Capital (TO)
- The turnover of capital exhibited a generally upward trend. Starting from 0.45 in 2017, it showed gradual increases each year, reaching 0.66 by 2021. This steady increase suggests improved efficiency in using capital to generate revenue over time.
- 1 – Effective Cash Tax Rate (CTR)
- The metric representing one minus the effective cash tax rate demonstrated significant variability throughout the timeframe. It remained high around 80% in 2017, 2018, and 2021, but dropped sharply in 2019 and reached a minimum of 10.14% in 2020. The recovery to 84.69% in 2021 indicates a return to a higher proportion of taxable income retained after taxes.
- Return on Invested Capital (ROIC)
- Return on invested capital showed a pattern similar to the operating profit margin, with a rise to 12.2% in 2018 followed by a significant decline to 0.25% in 2020. A substantial rebound to 12.7% in 2021 was observed. This suggests that the company’s ability to generate returns from its invested capital diminished sharply during the middle period but recovered strongly in the latest year.
- Overall Insights
- The data reveals a period of reduced profitability and return efficiencies around 2019 and 2020, with a notable recovery occurring in 2021. Efficiency in asset usage steadily improved throughout the entire period. The fluctuations in the effective cash tax rate component indicate varying tax dynamics affecting cash flow after tax during the years examined.
Operating Profit Margin (OPM)
NXP Semiconductors N.V., OPM calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Revenue | ||||||
| Profitability Ratio | ||||||
| OPM3 | ||||||
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| Monolithic Power Systems Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2021 Calculation
OPM = 100 × NOPBT ÷ Revenue
= 100 × ÷ =
4 Click competitor name to see calculations.
- Revenue Trends
- The revenue showed a fluctuating pattern over the five-year period. It initially increased slightly from 9,256 million US dollars in 2017 to 9,407 million in 2018, followed by a decline in the subsequent two years to 8,877 million in 2019 and then to 8,612 million in 2020. In 2021, revenue rebounded markedly to 11,063 million, representing the highest value in the period considered.
- Net Operating Profit Before Taxes (NOPBT)
- NOPBT displayed significant volatility throughout the period. After rising from 2,015 million US dollars in 2017 to a peak of 2,640 million in 2018, it plummeted substantially in 2019 to 578 million and further declined to 395 million in 2020. However, in 2021, NOPBT recovered substantially to 2,511 million, nearly reaching the 2017 level.
- Operating Profit Margin (OPM)
- The operating profit margin followed a pattern similar to NOPBT, indicating strong fluctuations in profitability relative to revenue. The margin improved from 21.77% in 2017 to its peak of 28.07% in 2018. A sharp decline occurred in 2019 and 2020, with the margin dropping to 6.52% and then further to 4.59%, reflecting the reduced profitability during those years. In 2021, the margin rebounded significantly to 22.69%, comparable to the margin levels experienced at the start of the period.
- Summary of Patterns and Insights
- The data reveals a notably cyclical performance trend. Both revenue and net operating profit before taxes declined during 2019 and 2020, correlating with a marked drop in operating profit margin, which suggests increased cost pressures or reduced operational efficiency during those years. The strong recovery in 2021 in all three metrics points to a return to improved financial health and profitability. The 2021 figures notably surpass or nearly match earlier high points in the period, indicating a successful rebound from the downturn. This could imply effective strategic or operational adjustments addressing prior challenges.
Turnover of Capital (TO)
NXP Semiconductors N.V., TO calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenue | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| Monolithic Power Systems Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
1 Invested capital. See details »
2 2021 Calculation
TO = Revenue ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
- Revenue
- Revenue exhibited moderate fluctuations over the observed period. Starting at $9,256 million in 2017, it showed a slight increase in 2018 to $9,407 million, followed by a decline in 2019 and 2020 to $8,877 million and $8,612 million respectively. There was a significant recovery and increase in 2021, with revenue rising sharply to $11,063 million, marking the highest level in the period.
- Invested Capital
- Invested capital showed a consistent declining trend from 2017 to 2020, decreasing from $20,519 million to $16,335 million. In 2021, the invested capital slightly increased to $16,745 million, signaling a potential change in investment strategy or asset base stabilization.
- Turnover of Capital (TO)
- The turnover of capital ratio improved steadily throughout the period. Starting at 0.45 in 2017, it increased to 0.52 in both 2018 and 2019, then slightly rose to 0.53 in 2020. A more pronounced increase occurred in 2021, reaching 0.66. This indicates enhanced efficiency in generating revenue from the invested capital over time.
Effective Cash Tax Rate (CTR)
NXP Semiconductors N.V., CTR calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| Monolithic Power Systems Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
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 exhibited fluctuations over the examined periods, starting at 386 million US dollars in 2017 and increasing to 445 million in 2018. A notable decrease occurred in 2019 to 275 million, followed by a partial recovery to 355 million in 2020 and a slight rise to 384 million in 2021. Overall, the values fluctuate but remain within a certain range, suggesting variability in tax payments possibly influenced by changes in profitability or tax regulations.
- Net operating profit before taxes (NOPBT)
- The net operating profit before taxes showed a significant upward trend in the first two years, rising from 2015 million US dollars in 2017 to a peak of 2640 million in 2018. This was followed by a sharp decline to 578 million in 2019 and a further drop to 395 million in 2020, indicating a substantial reduction in operating profitability during those years. In 2021, there was a strong recovery to 2511 million, nearly reaching the earlier peak, which suggests a notable rebound in operating performance by the end of the period.
- Effective cash tax rate (CTR)
- The effective cash tax rate displayed considerable volatility, beginning at 19.15% in 2017 and decreasing slightly to 16.84% in 2018. However, it increased dramatically to 47.56% in 2019 and reached an exceptionally high 89.86% in 2020, indicating a sharp rise in the proportion of operating profit paid as cash taxes during these years. In 2021, the tax rate dropped significantly to 15.31%, a level even lower than at the start of the period. This high variability reflects substantial changes in tax obligations relative to operating profits, likely due to changes in tax laws, tax planning strategies, or the impact of reduced profitability on effective tax rates.
- Overall analysis
- The data indicates a period of operational instability between 2019 and 2020, where net operating profit experienced severe declines while the effective tax rate surged, resulting in a disproportionate tax burden relative to profits. Recovery was observed in 2021, with net operating profit returning to near-peak levels and the effective tax rate falling sharply, contributing to a normalized tax expense. The fluctuations in cash operating taxes correspond with the changes in profitability and tax rate, highlighting the interconnected nature of these financial metrics.