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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Return on Invested Capital (ROIC)
T-Mobile US Inc., ROIC calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| 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: 2024-12-31), 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).
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.
The financial data reveals several noteworthy trends over the five-year period ending in 2024. Net operating profit after taxes (NOPAT) initially declined from 7,224 million US dollars in 2020 to 6,394 million in 2021 but then showed a gradual recovery and substantial growth in the following years, reaching 18,486 million in 2024. This upward trend in NOPAT from 2021 onward indicates a significant improvement in operational profitability.
Invested capital demonstrated a steady increase year over year, moving from 177,902 million US dollars in 2020 to 187,599 million in 2024. The relatively modest growth in invested capital suggests controlled expansion or asset base growth during this period.
The return on invested capital (ROIC) followed a pattern that aligns with the fluctuations in NOPAT. ROIC decreased from 4.06% in 2020 to 3.47% in 2021, reflecting the decline in profitability. However, thereafter, ROIC improved progressively, more than doubling by 2024 to 9.85%. This improvement signifies enhanced efficiency in using invested capital to generate profits, especially pronounced from 2022 onwards.
- Net operating profit after taxes (NOPAT)
- Initial decline in 2021, followed by a steep upward trajectory through 2024, culminating in more than doubling from 2020 levels.
- Invested capital
- Gradual and consistent increase, indicating moderate growth in asset base or capital investments.
- Return on invested capital (ROIC)
- Declined initially in 2021, then experienced a strong rebound and continuous improvement, suggesting greater operational effectiveness and capital utilization over the latter years.
Overall, the data indicates that after an initial setback in 2021, operational profitability and capital efficiency improved markedly. The significant rise in ROIC alongside NOPAT growth points to successful strategic or operational initiatives enhancing value creation. Meanwhile, the steady growth in invested capital appears to have been managed effectively to support and sustain increased profitability.
Decomposition of ROIC
T-Mobile US Inc., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2024 | = | × | × | ||||
| Dec 31, 2023 | = | × | × | ||||
| Dec 31, 2022 | = | × | × | ||||
| Dec 31, 2021 | = | × | × | ||||
| Dec 31, 2020 | = | × | × |
Based on: 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), 10-K (reporting date: 2020-12-31).
1 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
The financial data reveals several noteworthy trends and shifts over the five-year period under review.
- Operating Profit Margin (OPM)
- Initially, the operating profit margin showed a decline from 11.8% in 2020 to 9.31% in 2021. However, it recovered slightly to 10.32% in 2022 before witnessing a significant increase in the subsequent years, reaching 19.57% in 2023 and climbing further to 24.12% in 2024. This indicates substantial improvement in operational efficiency and profitability in the latter years.
- Turnover of Capital (TO)
- The turnover of capital ratio demonstrated relative stability, fluctuating modestly around the 0.39 to 0.44 range across the five years. Starting at 0.39 in 2020, it rose to 0.43 in 2021 and remained steady through 2022 and 2023 before a slight uptick to 0.44 in 2024. This suggests consistent utilization of capital in generating revenues without significant expansion or contraction.
- 1 – Effective Cash Tax Rate (CTR)
- This ratio remained consistently high throughout the period, ranging from approximately 85.86% to 93.7%. Despite some minor fluctuations, a gradual increase is evident, particularly after 2021, culminating at 93.7% in 2024. This trend points to a relatively stable but high effective cash tax burden, which could impact net profitability.
- Return on Invested Capital (ROIC)
- The return on invested capital started at a low base of 4.06% in 2020 and declined to 3.47% in 2021, reflecting diminished efficiency in capital deployment. A marginal recovery to 3.84% in 2022 preceded a notable rise to 7.68% in 2023 and an even higher value of 9.85% in 2024. This trajectory aligns with improvements seen in operating profit margin and suggests enhanced overall value generation from invested capital.
In summary, the data illustrates a marked improvement in profitability and capital returns in the latter part of the period, coupled with stable capital turnover and a consistently high effective cash tax rate. These dynamics highlight increasing operational effectiveness and financial performance enhancement over time, albeit with a significant tax impact remaining constant.
Operating Profit Margin (OPM)
T-Mobile US Inc., OPM calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| 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: 2024-12-31), 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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2024 Calculation
OPM = 100 × NOPBT ÷ Adjusted revenues
= 100 × ÷ =
4 Click competitor name to see calculations.
The financial data reveals several notable trends over the five-year period.
- Net Operating Profit Before Taxes (NOPBT)
- This metric demonstrated some variability in the initial years, with a decline from 8,119 million USD in 2020 to 7,447 million USD in 2021. However, it rebounded to 8,207 million USD in 2022 and then saw a significant increase in 2023, reaching 15,382 million USD. This upward momentum continued in 2024, resulting in a substantial rise to 19,729 million USD. Overall, NOPBT shows a strong growth trajectory starting from 2022.
- Adjusted Revenues
- Adjusted revenues increased from 68,796 million USD in 2020 to 79,944 million USD in 2021, indicating substantial growth. The figure slightly contracted to 79,495 million USD in 2022 and further declined to 78,603 million USD in 2023. However, in 2024, revenues recovered to 81,797 million USD, surpassing the 2021 peak. This indicates a generally positive but somewhat fluctuating revenue pattern with overall growth across the period.
- Operating Profit Margin (OPM)
- The operating profit margin experienced an initial decline from 11.8% in 2020 to 9.31% in 2021, followed by a modest recovery to 10.32% in 2022. A marked improvement occurred thereafter, with OPM reaching 19.57% in 2023 and further increasing to 24.12% in 2024. This indicates significant enhancement in profitability efficiency in the latter years, potentially driven by improved operational leverage or cost management.
In summary, while revenues experienced some variability, the company markedly improved its profitability from 2022 onwards. The sharp increase in net operating profit before taxes along with rising operating profit margins in the last two years suggests enhanced operational performance and profitability despite the relatively stable revenue figures.
Turnover of Capital (TO)
T-Mobile US Inc., TO calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| 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: 2024-12-31), 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).
1 Invested capital. See details »
2 2024 Calculation
TO = Adjusted revenues ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
- Adjusted Revenues
- Adjusted revenues demonstrate a generally positive trend over the five-year period. Starting at 68,796 million US dollars in 2020, the revenues increased significantly to 79,944 million in 2021. After this peak, revenues slightly declined to 79,495 million in 2022 and further to 78,603 million in 2023, indicating a minor consolidation phase. By 2024, revenues rose again to 81,797 million, marking the highest value in the given period and suggesting a recovery or growth phase.
- Invested Capital
- Invested capital shows a steady, incremental increase across the five years. Beginning at 177,902 million US dollars in 2020, the invested capital grew gradually to 184,079 million in 2021, then to 186,262 million in 2022. There was practically no change from 2022 to 2023, with values of 186,262 and 186,258 million respectively, indicating a plateau. Finally, invested capital slightly increased again to 187,599 million in 2024. This trend suggests stable investment levels with a pause during 2022-2023 and resumed moderate investment thereafter.
- Turnover of Capital (TO)
- The turnover of capital ratio reflects the efficiency of capital use in generating revenues. The ratio started at 0.39 in 2020, increased to 0.43 in 2021, and remained stable at 0.43 in 2022. It then slightly decreased to 0.42 in 2023 before increasing again to 0.44 in 2024. This pattern implies generally improved capital efficiency over the period, despite a minor dip in 2023, reaching its highest level in 2024. The ratio indicates that the company has become more effective in utilizing its invested capital to produce adjusted revenues over time.
- Overall Insights
- Overall, the data reveals an upward trajectory in adjusted revenues with minor fluctuations that suggest phases of consolidation and recovery. Invested capital grew steadily with a brief pause, indicating consistent capital deployment strategies with cautious investment levels during 2022-2023. The turnover of capital ratio signals an improvement in capital efficiency, highlighting enhanced operational effectiveness. Together, these trends point to a stable financial position with growing revenues and increasingly efficient use of invested capital across the analyzed period.
Effective Cash Tax Rate (CTR)
T-Mobile US Inc., CTR calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| 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: 2024-12-31), 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).
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.
The financial data over the five-year period indicates notable trends in cash operating taxes, net operating profit before taxes (NOPBT), and the effective cash tax rate (CTR).
- Cash Operating Taxes
- The cash operating taxes have shown a gradual increase from 895 million US dollars in 2020 to 1244 million US dollars in 2024. The rise is relatively steady, with only minor increments between consecutive years except for a more pronounced increase in 2024.
- Net Operating Profit Before Taxes (NOPBT)
- The NOPBT figures fluctuate initially but demonstrate significant growth towards the later years. Starting at 8119 million US dollars in 2020, there is a slight decrease in 2021 to 7447 million US dollars, followed by an increase to 8207 million US dollars in 2022. A substantial jump occurs in 2023 to 15,382 million US dollars, continuing upward to 19,729 million US dollars in 2024. This pattern suggests improved operational profitability and possibly enhanced efficiency or market conditions in recent years.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate shows a general declining trend over the observed period. Beginning at 11.02% in 2020, it rises to 14.14% in 2021, then gradually decreases to 12.89% in 2022, followed by a more pronounced decline to 6.95% in 2023 and 6.3% in 2024. The notable decrease in the last two years indicates effective tax management or changes in applicable tax regulations, contributing to a lower tax burden relative to operating profits.
Overall, the data reflects a scenario where operating profitability has increased significantly, especially in the last two years, while the cash tax burden has increased only moderately and the effective cash tax rate has declined considerably. This combination points toward enhanced profitability alongside improved tax efficiency.