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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- Income Statement
- Analysis of Profitability Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Reportable Segments
- Analysis of Geographic Areas
- Enterprise Value to FCFF (EV/FCFF)
- Dividend Discount Model (DDM)
- Operating Profit Margin since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
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Return on Invested Capital (ROIC)
Starbucks Corp., ROIC calculation, comparison to benchmarks
| Sep 29, 2024 | Oct 1, 2023 | Oct 2, 2022 | Oct 3, 2021 | Sep 27, 2020 | Sep 29, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net operating profit after taxes (NOPAT)1 | |||||||
| Invested capital2 | |||||||
| Performance Ratio | |||||||
| ROIC3 | |||||||
| Benchmarks | |||||||
| ROIC, Competitors4 | |||||||
| Airbnb Inc. | |||||||
| Booking Holdings Inc. | |||||||
| Chipotle Mexican Grill Inc. | |||||||
| McDonald’s Corp. | |||||||
Based on: 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29).
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 exhibited a significant decrease from 2,231,571 thousand USD in 2019 to 1,475,541 thousand USD in 2020. This was followed by a marked recovery and growth in 2021, reaching 4,625,159 thousand USD. Subsequently, there was a decline to 3,732,356 thousand USD in 2022, before increasing again to 4,602,842 thousand USD in 2023. The most recent data in 2024 shows a slight decrease to 4,408,732 thousand USD. Overall, NOPAT demonstrated volatility with a strong rebound after 2020 and fluctuations in the last three years.
- Invested Capital
- Invested capital increased from 20,030,637 thousand USD in 2019 to 22,970,900 thousand USD in 2020, followed by a moderate rise to 23,683,800 thousand USD in 2021. In 2022, invested capital decreased to 20,459,700 thousand USD but increased again in 2023 to 22,171,000 thousand USD, and further to 23,526,800 thousand USD in 2024. The capital investment displayed a trend of overall growth with a temporary dip in 2022.
- Return on Invested Capital (ROIC)
- The return on invested capital showed a decline from 11.14% in 2019 to 6.42% in 2020, coinciding with the drop in NOPAT. It then surged to 19.53% in 2021 and remained relatively high in subsequent years, with 18.24% in 2022, peaking at 20.76% in 2023, and slightly decreasing to 18.74% in 2024. This indicates an improved efficiency in generating returns from invested capital post-2020, despite the fluctuations in absolute profit values and capital base.
Decomposition of ROIC
Starbucks Corp., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Sep 29, 2024 | = | × | × | ||||
| Oct 1, 2023 | = | × | × | ||||
| Oct 2, 2022 | = | × | × | ||||
| Oct 3, 2021 | = | × | × | ||||
| Sep 27, 2020 | = | × | × | ||||
| Sep 29, 2019 | = | × | × |
Based on: 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29).
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 significant fluctuations over the observed periods. It dropped sharply from 17.94% in 2019 to 7.99% in 2020, indicating a notable decline in operating profitability. This was followed by a robust recovery to 20.82% in 2021. However, after 2021, the margin declined again, registering 14.97% in 2022 and slightly increasing to 17.05% in 2023 before decreasing to 16.12% in 2024. Overall, despite some volatility, the profit margin maintained a relatively strong level post-2020.
- Turnover of Capital (TO)
- The turnover of capital displayed a declining trend from 2019 (1.3) to 2020 (1.03), implying reduced efficiency in utilizing invested capital during that period. Subsequently, a steady improvement occurred, peaking at 1.62 in 2023, reflecting enhanced asset use. In 2024, a minor reduction to 1.54 was observed, though the level remains higher than the initial years, indicating overall better capital turnover efficiency in the latter years.
- 1 – Effective Cash Tax Rate (CTR)
- The complement of the effective cash tax rate (i.e., one minus the effective cash tax rate) saw a significant increase from 47.65% in 2019 to 78.43% in 2020, suggesting a substantial reduction in effective tax payments relative to earnings that year. It stabilized at high levels thereafter, fluctuating modestly between 75.27% and 78.43% from 2020 through 2024. This trend points to consistently lower cash tax burdens during this stretch compared to 2019.
- Return on Invested Capital (ROIC)
- ROIC followed a pattern similar to the operating profit margin. It declined markedly from 11.14% in 2019 to 6.42% in 2020, implying reduced efficiency in generating returns from invested capital. A strong rebound occurred in 2021 reaching 19.53%, followed by a slight decrease in subsequent years, with values of 18.24% in 2022, a peak of 20.76% in 2023, and then a decline to 18.74% in 2024. The overall trend post-2020 indicates a significant recovery and sustained improved performance in return generation.
Operating Profit Margin (OPM)
Starbucks Corp., OPM calculation, comparison to benchmarks
| Sep 29, 2024 | Oct 1, 2023 | Oct 2, 2022 | Oct 3, 2021 | Sep 27, 2020 | Sep 29, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net operating profit after taxes (NOPAT)1 | |||||||
| Add: Cash operating taxes2 | |||||||
| Net operating profit before taxes (NOPBT) | |||||||
| Net revenues | |||||||
| Add: Increase (decrease) in stored value card liability and deferred revenue | |||||||
| Adjusted net revenues | |||||||
| Profitability Ratio | |||||||
| OPM3 | |||||||
| Benchmarks | |||||||
| OPM, Competitors4 | |||||||
| Airbnb Inc. | |||||||
| Booking Holdings Inc. | |||||||
| Chipotle Mexican Grill Inc. | |||||||
| McDonald’s Corp. | |||||||
Based on: 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2024 Calculation
OPM = 100 × NOPBT ÷ Adjusted net revenues
= 100 × ÷ =
4 Click competitor name to see calculations.
- Net operating profit before taxes (NOPBT)
- The NOPBT shows substantial fluctuation over the analyzed periods. It dropped significantly from approximately 4.68 billion USD in 2019 to about 1.88 billion USD in 2020, indicating a sharp decline. However, it rebounded strongly in 2021, reaching over 6.05 billion USD, the highest value in the timeframe. Subsequent years show variability but remained above 4.8 billion USD, stabilizing near 5.8 billion USD by 2024.
- Adjusted net revenues
- Adjusted net revenues illustrate a consistent upward trend across the years. Starting at around 26.1 billion USD in 2019, revenues declined somewhat in 2020 to 23.6 billion USD, likely influenced by external factors. From 2021 onwards, net revenues increased steadily, reaching over 36.1 billion USD by 2024, representing considerable growth from the initial year.
- Operating profit margin (OPM)
- The OPM reflects considerable volatility in profitability percentages. It declined sharply from 17.94% in 2019 to a low of 7.99% in 2020, aligning with the dip in profit and revenue. After the recovery period, the margin peaked at 20.82% in 2021, indicating efficient operations during that year. However, margins then decreased to around 14.97% and stabilized between 16.12% and 17.05% in the following years, suggesting a return to moderate profitability levels.
- Overall Analysis
- The company experienced a significant downturn in profitability and revenues in 2020, followed by a strong recovery in 2021. Despite some fluctuations in subsequent years, revenues have shown a consistent upward trajectory, while profit margins reflect moderate stability. The data indicates resilience and growth potential, although profitability margins have yet to return to peak levels observed in 2021.
Turnover of Capital (TO)
Starbucks Corp., TO calculation, comparison to benchmarks
| Sep 29, 2024 | Oct 1, 2023 | Oct 2, 2022 | Oct 3, 2021 | Sep 27, 2020 | Sep 29, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net revenues | |||||||
| Add: Increase (decrease) in stored value card liability and deferred revenue | |||||||
| Adjusted net revenues | |||||||
| Invested capital1 | |||||||
| Efficiency Ratio | |||||||
| TO2 | |||||||
| Benchmarks | |||||||
| TO, Competitors3 | |||||||
| Airbnb Inc. | |||||||
| Booking Holdings Inc. | |||||||
| Chipotle Mexican Grill Inc. | |||||||
| McDonald’s Corp. | |||||||
Based on: 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29).
1 Invested capital. See details »
2 2024 Calculation
TO = Adjusted net revenues ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
- Adjusted net revenues
- The adjusted net revenues demonstrated an overall upward trend over the observed periods. Starting from 26,103,400 thousand US dollars in 2019, revenue experienced a decline in 2020 to 23,559,600 thousand US dollars, likely reflecting external challenges during that year. Subsequently, revenues increased significantly each year, reaching 36,119,000 thousand US dollars by 2024. This indicates a strong recovery and consistent growth in revenue generation post-2020.
- Invested capital
- Invested capital showed variability throughout the period. It increased from 20,030,637 thousand US dollars in 2019 to a peak of 23,970,900 thousand US dollars in 2020. After a slight decrease in 2022 to 20,459,700 thousand US dollars, it rose again steadily, reaching 23,526,800 thousand US dollars in 2024. This pattern suggests periods of strategic capital deployment and retraction, possibly responding to shifts in business conditions or investment priorities.
- Turnover of capital (TO)
- The turnover of capital ratio exhibited meaningful fluctuations that correspond inversely with movements in invested capital. It started at 1.3 in 2019, declined to its lowest point of 1.03 in 2020, then improved markedly to 1.57 in 2022 and peaked at 1.62 in 2023 before a slight decrease to 1.54 in 2024. This progression reflects increasing efficiency in using invested capital to generate revenues following the dip in 2020, indicating operational improvements or better asset utilization during the recovery phase.
Effective Cash Tax Rate (CTR)
Starbucks Corp., CTR calculation, comparison to benchmarks
| Sep 29, 2024 | Oct 1, 2023 | Oct 2, 2022 | Oct 3, 2021 | Sep 27, 2020 | Sep 29, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net operating profit after taxes (NOPAT)1 | |||||||
| Add: Cash operating taxes2 | |||||||
| Net operating profit before taxes (NOPBT) | |||||||
| Tax Rate | |||||||
| CTR3 | |||||||
| Benchmarks | |||||||
| CTR, Competitors4 | |||||||
| Airbnb Inc. | |||||||
| Booking Holdings Inc. | |||||||
| Chipotle Mexican Grill Inc. | |||||||
| McDonald’s Corp. | |||||||
Based on: 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29).
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 considerable fluctuations over the reported periods. Starting at a high level in 2019, there is a significant decline in 2020. This is followed by a recovery trend with an increase in 2021. However, the figure drops again in 2022 before exhibiting a gradual increase through 2023 and into 2024, though not reaching the 2019 peak value.
- Net operating profit before taxes (NOPBT)
- The NOPBT shows noticeable volatility. It declines sharply in 2020 compared to 2019, likely indicating operational challenges. Subsequently, there is a strong recovery in 2021, surpassing 2019 levels. The profit then dips in 2022 but rises again in 2023, reaching the highest observed value in the series. The 2024 figure shows a slight decrease from 2023 but remains significantly higher than earlier years except 2023.
- Effective cash tax rate (CTR)
- The effective cash tax rate experiences a marked decrease from over 50% in 2019 to levels around 21-24% in subsequent years. This more stable, lower tax rate persists through 2020 to 2024, with minor fluctuations suggesting enhanced tax efficiency or changes in tax management strategies during these years.
- Overall trends and insights
- The financial data reveals a pattern of operational recovery following a dip in 2020, which may correlate with challenging external conditions during that year. The NOPBT trend indicates resilience and growth after the downturn, while cash operating taxes do not proportionally follow the profit increases, likely influenced by the reduced effective cash tax rate sustained after 2019. The data suggests improved tax efficiency or different tax planning approaches implemented from 2020 onwards. Despite fluctuations, the company maintains profitability growth momentum, with careful tax management reflected in the effective tax rates.