Return on capital (ROC) is after tax rate of return on net business assets. ROIC is unaffected by changes in interest rates or company’s debt and equity structure. It measures business productivity performance.

Return on Invested Capital (ROIC)
Decomposition of ROIC
Operating Profit Margin (OPM)
Turnover of Capital (TO)
Effective Cash Tax Rate (CTR)

Qualcomm Inc., ROIC calculation, comparison to benchmarks

	Sep 27, 2020	Sep 29, 2019	Sep 30, 2018	Sep 24, 2017	Sep 25, 2016	Sep 27, 2015
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)¹	4,798	5,963	(3,095)	938	4,867	4,006
Invested capital²	17,459	21,089	18,490	48,879	17,942	20,259
Performance Ratio
ROIC³	27.48%	28.27%	-16.74%	1.92%	27.12%	19.77%
Benchmarks
ROIC, Competitors⁴
Advanced Micro Devices Inc.	30.67%	11.73%	13.53%	2.05%	-14.86%	—
Analog Devices Inc.	6.95%	8.23%	4.98%	0.38%	23.10%	15.63%
Applied Materials Inc.	29.58%	28.91%	29.78%	31.69%	20.54%	11.10%
Broadcom Inc.	4.80%	5.00%	10.03%	3.52%	-1.55%	15.58%
Intel Corp.	27.99%	26.74%	23.84%	10.03%	16.51%	—
Lam Research Corp.	24.20%	20.10%	25.72%	31.56%	10.67%	15.45%
Micron Technology Inc.	6.84%	17.15%	39.70%	18.99%	-0.03%	19.12%
NVIDIA Corp.	19.63%	79.86%	41.40%	40.74%	31.19%	—
Texas Instruments Inc.	43.48%	43.15%	44.66%	32.30%	28.86%	—

Based on: 10-K (filing date: 2020-11-04), 10-K (filing date: 2019-11-06), 10-K (filing date: 2018-11-07), 10-K (filing date: 2017-11-01), 10-K (filing date: 2016-11-02), 10-K (filing date: 2015-11-04).

¹ NOPAT. See details »

² Invested capital. See details »

³ 2020 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 4,798 ÷ 17,459 = 27.48%

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.	Qualcomm Inc.’s ROIC improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.

Qualcomm Inc., decomposition of ROIC


	ROIC	=	OPM¹	×	TO²	×	1 – CTR³
Sep 27, 2020	27.48%	=	24.17%	×	1.33	×	85.81%
Sep 29, 2019	28.27%	=	29.86%	×	1.13	×	83.63%
Sep 30, 2018	-16.74%	=	1.24%	×	1.21	×	-1,115.96%
Sep 24, 2017	1.92%	=	9.45%	×	0.45	×	45.32%
Sep 25, 2016	27.12%	=	26.09%	×	1.30	×	79.85%
Sep 27, 2015	19.77%	=	20.10%	×	1.21	×	80.99%

Based on: 10-K (filing date: 2020-11-04), 10-K (filing date: 2019-11-06), 10-K (filing date: 2018-11-07), 10-K (filing date: 2017-11-01), 10-K (filing date: 2016-11-02), 10-K (filing date: 2015-11-04).

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 2020 year is the decrease in profitability measured by operating profit margin (OPM) ratio.

Qualcomm Inc., OPM calculation, comparison to benchmarks

	Sep 27, 2020	Sep 29, 2019	Sep 30, 2018	Sep 24, 2017	Sep 25, 2016	Sep 27, 2015
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)¹	4,798	5,963	(3,095)	938	4,867	4,006
Add: Cash operating taxes²	793	1,167	3,372	1,132	1,228	940
Net operating profit before taxes (NOPBT)	5,591	7,130	277	2,070	6,095	4,946

Revenues	23,531	24,273	22,732	22,291	23,554	25,281
Add: Increase (decrease) in unearned revenues	(396)	(395)	(385)	(381)	(193)	(673)
Adjusted revenues	23,135	23,878	22,347	21,910	23,361	24,608
Profitability Ratio
OPM³	24.17%	29.86%	1.24%	9.45%	26.09%	20.10%
Benchmarks
OPM, Competitors⁴
Advanced Micro Devices Inc.	13.98%	6.80%	5.88%	2.42%	-5.94%	—
Analog Devices Inc.	26.98%	29.60%	30.11%	21.16%	30.31%	23.13%
Applied Materials Inc.	25.57%	23.89%	26.89%	29.01%	22.15%	17.40%
Broadcom Inc.	17.10%	15.65%	24.22%	12.14%	-2.93%	24.07%
Intel Corp.	32.65%	33.40%	30.95%	26.66%	21.44%	—
Lam Research Corp.	27.26%	20.46%	29.43%	27.76%	18.88%	18.03%
Micron Technology Inc.	14.37%	29.89%	47.86%	28.39%	1.37%	21.08%
NVIDIA Corp.	26.65%	33.09%	32.77%	24.50%	14.96%	—
Texas Instruments Inc.	43.13%	40.81%	43.25%	41.06%	37.64%	—

Based on: 10-K (filing date: 2020-11-04), 10-K (filing date: 2019-11-06), 10-K (filing date: 2018-11-07), 10-K (filing date: 2017-11-01), 10-K (filing date: 2016-11-02), 10-K (filing date: 2015-11-04).

¹ NOPAT. See details »

² Cash operating taxes. See details »

³ 2020 Calculation
OPM = 100 × NOPBT ÷ Adjusted revenues
= 100 × 5,591 ÷ 23,135 = 24.17%

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.	Qualcomm Inc.’s OPM improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.

Qualcomm Inc., TO calculation, comparison to benchmarks

	Sep 27, 2020	Sep 29, 2019	Sep 30, 2018	Sep 24, 2017	Sep 25, 2016	Sep 27, 2015
Selected Financial Data (US$ in millions)
Revenues	23,531	24,273	22,732	22,291	23,554	25,281
Add: Increase (decrease) in unearned revenues	(396)	(395)	(385)	(381)	(193)	(673)
Adjusted revenues	23,135	23,878	22,347	21,910	23,361	24,608

Invested capital¹	17,459	21,089	18,490	48,879	17,942	20,259
Efficiency Ratio
TO²	1.33	1.13	1.21	0.45	1.30	1.21
Benchmarks
TO, Competitors³
Advanced Micro Devices Inc.	2.23	1.97	2.43	2.39	1.90	—
Analog Devices Inc.	0.31	0.33	0.33	0.26	0.85	0.86
Applied Materials Inc.	1.31	1.44	1.52	1.20	1.09	0.83
Broadcom Inc.	0.36	0.38	0.47	0.35	0.29	0.81
Intel Corp.	0.95	0.89	0.94	0.94	0.92	—
Lam Research Corp.	1.02	1.15	1.15	1.15	0.64	0.95
Micron Technology Inc.	0.51	0.60	0.86	0.71	0.56	0.97
NVIDIA Corp.	0.77	2.45	1.50	1.71	2.08	—
Texas Instruments Inc.	1.12	1.19	1.26	1.26	1.11	—

Based on: 10-K (filing date: 2020-11-04), 10-K (filing date: 2019-11-06), 10-K (filing date: 2018-11-07), 10-K (filing date: 2017-11-01), 10-K (filing date: 2016-11-02), 10-K (filing date: 2015-11-04).

¹ Invested capital. See details »

² 2020 Calculation
TO = Adjusted revenues ÷ Invested capital
= 23,135 ÷ 17,459 = 1.33

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.	Qualcomm Inc.’s TO deteriorated from 2018 to 2019 but then improved from 2019 to 2020 exceeding 2018 level.

Qualcomm Inc., CTR calculation, comparison to benchmarks

	Sep 27, 2020	Sep 29, 2019	Sep 30, 2018	Sep 24, 2017	Sep 25, 2016	Sep 27, 2015
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)¹	4,798	5,963	(3,095)	938	4,867	4,006
Add: Cash operating taxes²	793	1,167	3,372	1,132	1,228	940
Net operating profit before taxes (NOPBT)	5,591	7,130	277	2,070	6,095	4,946
Tax Rate
CTR³	14.19%	16.37%	1,215.96%	54.68%	20.15%	19.01%
Benchmarks
CTR, Competitors⁴
Advanced Micro Devices Inc.	1.75%	12.55%	5.44%	64.46%	—	—
Analog Devices Inc.	16.31%	14.82%	50.33%	93.08%	10.78%	21.70%
Applied Materials Inc.	11.98%	16.09%	27.18%	8.67%	14.87%	23.00%
Broadcom Inc.	22.63%	15.10%	11.38%	16.03%	—	19.97%
Intel Corp.	9.76%	10.33%	18.16%	59.84%	16.68%	—
Lam Research Corp.	13.09%	14.26%	24.00%	1.52%	11.77%	10.13%
Micron Technology Inc.	6.13%	4.94%	3.36%	6.08%	104.15%	6.24%
NVIDIA Corp.	4.59%	1.47%	15.99%	2.78%	-0.02%	—
Texas Instruments Inc.	9.63%	11.38%	18.14%	37.69%	31.13%	—

Based on: 10-K (filing date: 2020-11-04), 10-K (filing date: 2019-11-06), 10-K (filing date: 2018-11-07), 10-K (filing date: 2017-11-01), 10-K (filing date: 2016-11-02), 10-K (filing date: 2015-11-04).

¹ NOPAT. See details »

² Cash operating taxes. See details »

³ 2020 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 793 ÷ 5,591 = 14.19%

⁴ Click competitor name to see calculations.

Tax rate	Description	The company
CTR	Effective cash tax rate on operating income.	Qualcomm Inc.’s CTR decreased from 2018 to 2019 and from 2019 to 2020.

Qualcomm Inc. (NASDAQ:QCOM)

Return on Capital (ROC)

Return on Invested Capital (ROIC)

Decomposition of ROIC

Operating Profit Margin (OPM)

Turnover of Capital (TO)

Effective Cash Tax Rate (CTR)