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.
Paying user area
Try for free
T-Mobile US Inc. pages available for free this week:
- Common-Size Income Statement
- Analysis of Profitability Ratios
- Analysis of Solvency Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Dividend Discount Model (DDM)
- Selected Financial Data since 2013
- Net Profit Margin since 2013
- Current Ratio since 2013
- Price to Earnings (P/E) since 2013
- Analysis of Debt
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to T-Mobile US Inc. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Return on Invested Capital (ROIC)
T-Mobile US Inc., ROIC calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| ROIC3 | ||||||
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| AT&T Inc. | ||||||
| Verizon Communications Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 NOPAT. See details »
2 Invested capital. See details »
3 2025 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The period under review demonstrates a significant upward trend in Return on Invested Capital (ROIC). Net operating profit after taxes (NOPAT) and invested capital both increased over the five-year period, but the increase in NOPAT was substantially more pronounced, driving the improvement in ROIC.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT experienced consistent growth, starting at US$6,394 million in 2021 and reaching US$18,761 million in 2025. The most substantial increase occurred between 2022 and 2023, more than doubling from US$7,149 million to US$14,313 million. Growth slowed between 2023 and 2025, with a modest increase from US$14,313 million to US$18,761 million.
- Invested Capital
- Invested capital exhibited a more moderate growth pattern. It increased from US$184,079 million in 2021 to US$198,267 million in 2025. The rate of increase was relatively consistent across the period, with fluctuations remaining minimal. A slight decrease was observed between 2022 and 2023, but it was quickly recovered in subsequent years.
- Return on Invested Capital (ROIC)
- ROIC increased markedly throughout the period. Starting at 3.47% in 2021, it rose to 9.85% in 2024 before slightly decreasing to 9.46% in 2025. The largest increase in ROIC occurred between 2022 and 2023, reflecting the substantial growth in NOPAT relative to the comparatively stable invested capital. The slight decline in ROIC from 2024 to 2025 suggests that while NOPAT continued to grow, the rate of growth did not keep pace with the increase in invested capital.
The observed trends indicate improving profitability and efficiency in capital allocation. The substantial increase in NOPAT suggests successful operational improvements or favorable market conditions. While invested capital grew, the ROIC increase demonstrates that the company generated increasingly higher returns from its capital base. The slight decrease in ROIC in the final year warrants further investigation to determine if it represents a temporary fluctuation or the beginning of a new trend.
Decomposition of ROIC
T-Mobile US Inc., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2025 | = | × | × | ||||
| Dec 31, 2024 | = | × | × | ||||
| Dec 31, 2023 | = | × | × | ||||
| Dec 31, 2022 | = | × | × | ||||
| Dec 31, 2021 | = | × | × |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
The period demonstrates a significant improvement in financial performance, as evidenced by the increasing Return on Invested Capital (ROIC). This improvement appears to be driven by increases in operating profitability and, to a lesser extent, capital efficiency, partially offset by fluctuations in the effective tax rate.
- Operating Profit Margin (OPM)
- The Operating Profit Margin exhibits a strong upward trend, increasing from 9.31% in 2021 to 24.12% in 2024 before slightly decreasing to 22.87% in 2025. This indicates a substantial improvement in the company’s ability to generate profit from its core operations. The most significant increase occurred between 2022 and 2023, suggesting a potentially transformative shift in operational efficiency or pricing power. The slight decline in 2025 warrants further investigation.
- Turnover of Capital (TO)
- Turnover of Capital remains relatively stable throughout the period, fluctuating between 0.42 and 0.45. This suggests consistent efficiency in utilizing capital to generate revenue. A modest increase is observed from 2023 to 2025, indicating a slight improvement in capital utilization, but the effect is less pronounced than the changes observed in the Operating Profit Margin.
- Effective Cash Tax Rate Adjustment
- The factor representing one minus the Effective Cash Tax Rate generally increases over the period, moving from 85.86% in 2021 to 93.70% in 2024, then decreasing slightly to 92.56% in 2025. This implies a decreasing effective tax burden, positively impacting after-tax returns. The increase is most notable between 2021 and 2024, contributing to the overall improvement in ROIC. The slight decrease in 2025 suggests a potential normalization of the tax rate.
- Return on Invested Capital (ROIC)
- Return on Invested Capital demonstrates a clear positive trend, rising from 3.47% in 2021 to a peak of 9.85% in 2024, before decreasing slightly to 9.46% in 2025. This increase is directly attributable to the combined effects of the improved Operating Profit Margin and the adjusted effective tax rate, with a minor contribution from the stable Turnover of Capital. The slight decrease in 2025, while minimal, suggests that the momentum from previous years may be moderating.
In summary, the observed trends indicate a period of significant improvement in profitability and capital efficiency, resulting in a substantial increase in ROIC. While the slight declines in Operating Profit Margin and ROIC in 2025 warrant monitoring, the overall performance remains considerably stronger than in previous years.
Operating Profit Margin (OPM)
T-Mobile US Inc., OPM calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Revenues | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenues | ||||||
| Profitability Ratio | ||||||
| OPM3 | ||||||
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| AT&T Inc. | ||||||
| Verizon Communications Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2025 Calculation
OPM = 100 × NOPBT ÷ Adjusted revenues
= 100 × ÷ =
4 Click competitor name to see calculations.
The operating profit margin exhibited a clear upward trend between 2021 and 2024, followed by a slight decrease in the most recent year presented. Net operating profit before taxes also demonstrated substantial growth over the period, though at a varying rate. Adjusted revenues showed initial decline before recovering and increasing significantly in the later years.
- Operating Profit Margin (OPM)
- The operating profit margin began at 9.31% in 2021 and increased to 10.32% in 2022, indicating a modest improvement in profitability relative to revenue. A significant jump occurred in 2023, with the OPM reaching 19.57%. This positive trend continued into 2024, where the OPM peaked at 24.12%. However, in 2025, the OPM experienced a slight decline to 22.87%, suggesting a potential stabilization or a minor reduction in operational efficiency. The overall trend suggests improving profitability, though the latest figure indicates this improvement may be moderating.
- Net Operating Profit Before Taxes (NOPBT)
- Net operating profit before taxes increased from US$7,447 million in 2021 to US$8,207 million in 2022, mirroring the initial increase in OPM. The most substantial growth in NOPBT occurred between 2022 and 2023, rising to US$15,382 million. Further growth was observed in 2024, reaching US$19,729 million, and a more moderate increase to US$20,271 million in 2025. The consistent growth in NOPBT, despite the slight OPM decrease in 2025, suggests revenue growth contributed significantly to overall profit improvement in that year.
- Adjusted Revenues
- Adjusted revenues experienced a slight decrease from US$79,944 million in 2021 to US$79,495 million in 2022. However, revenues began to recover in 2023, reaching US$78,603 million, before demonstrating more substantial growth in 2024, reaching US$81,797 million. The largest increase in adjusted revenues occurred between 2024 and 2025, with revenues reaching US$88,620 million. This revenue growth likely contributed to the sustained profitability observed in the later years.
The interplay between these metrics suggests a period of significant operational improvement and revenue expansion. While the operating profit margin experienced a slight pullback in the most recent year, the overall trend remains positive, and the substantial growth in net operating profit before taxes and adjusted revenues indicates a strong financial performance.
Turnover of Capital (TO)
T-Mobile US Inc., TO calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenues | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| AT&T Inc. | ||||||
| Verizon Communications Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Invested capital. See details »
2 2025 Calculation
TO = Adjusted revenues ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
The analysis reveals a generally stable, slightly increasing trend in the turnover of capital over the five-year period. While fluctuations exist, the metric demonstrates a modest improvement from 2021 to 2025.
- Adjusted Revenues
- Adjusted revenues experienced a slight decrease from 2021 to 2022, followed by a further decrease in 2023. A recovery is observed in 2024, with continued growth into 2025, reaching 88,620 US$ in millions. This suggests a potential stabilization and subsequent expansion of the company’s revenue-generating capacity.
- Invested Capital
- Invested capital remained relatively consistent between 2021 and 2023, fluctuating minimally around 186,000 US$ in millions. A gradual increase is apparent in 2024 and 2025, reaching 198,267 US$ in millions. This indicates a continued investment in the business, potentially supporting future growth initiatives.
- Turnover of Capital (TO)
- The turnover of capital remained consistent at 0.43 for both 2021 and 2022. A slight decrease to 0.42 was observed in 2023, before increasing to 0.44 in 2024 and further to 0.45 in 2025. This indicates a modest improvement in the efficiency with which capital is being utilized to generate revenue. The increase in TO, coupled with the revenue growth in 2024 and 2025, suggests that recent investments are beginning to yield positive results.
Overall, the observed trends suggest a company that is effectively managing its capital base, with a slight improvement in capital utilization efficiency over the analyzed period. The increasing revenues in the later years, alongside the growing invested capital, point towards a potential growth trajectory.
Effective Cash Tax Rate (CTR)
T-Mobile US Inc., CTR calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| 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 | ||||||
| AT&T Inc. | ||||||
| Verizon Communications Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2025 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × ÷ =
4 Click competitor name to see calculations.
The effective cash tax rate exhibited a declining trend over the observed period, followed by a slight increase in the most recent year. Cash operating taxes demonstrated consistent growth throughout the period, while net operating profit before taxes experienced significant fluctuations.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate decreased from 14.14% in 2021 to 12.89% in 2022, representing a modest reduction. A more substantial decline was observed between 2022 and 2023, with the rate falling to 6.95%. This downward trend continued into 2024, reaching a low of 6.30%. However, in 2025, the rate increased slightly to 7.44%, indicating a potential stabilization or reversal of the prior decline.
- Cash Operating Taxes
- Cash operating taxes increased steadily from US$1,053 million in 2021 to US$1,509 million in 2025. This consistent growth suggests an increasing tax burden, despite the decreasing effective tax rate for much of the period. The incremental increases were approximately US$5 million from 2021 to 2022, US$11 million from 2022 to 2023, US$175 million from 2023 to 2024, and US$265 million from 2024 to 2025.
- Net Operating Profit Before Taxes (NOPBT)
- Net operating profit before taxes showed considerable variability. It increased from US$7,447 million in 2021 to US$8,207 million in 2022, a moderate gain. A significant jump occurred between 2022 and 2023, with NOPBT reaching US$15,382 million. Further growth was seen in 2024, reaching US$19,729 million, but the rate of increase slowed in 2025, with NOPBT at US$20,271 million. The substantial increases in NOPBT likely contributed to the initial declines in the effective cash tax rate.
The combination of increasing cash operating taxes and fluctuating net operating profit before taxes resulted in the observed pattern for the effective cash tax rate. The increase in the CTR in 2025, despite continued growth in NOPBT, warrants further investigation to determine the underlying drivers.