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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- Cash Flow Statement
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Debt to Equity since 2010
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Return on Invested Capital (ROIC)
Tesla 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 | ||||||
| Ford Motor Co. | ||||||
| General Motors Co. | ||||||
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 indicates dynamic changes over the five-year period under review. Key performance indicators such as Net Operating Profit After Taxes (NOPAT), Invested Capital, and Return on Invested Capital (ROIC) reveal distinct trends.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT experienced a significant upward trajectory from 2020 to 2022, rising sharply from approximately 2,291 million US dollars to 14,874 million US dollars. However, this growth was followed by a notable decline in the subsequent years, with NOPAT decreasing to 11,309 million in 2023 and further to 8,828 million in 2024. This pattern suggests that while operational profitability improved substantially initially, there was a contraction in profitability after 2022.
- Invested Capital
- Invested Capital consistently increased throughout the period, starting at 39,217 million US dollars in 2020 and growing steadily each year to reach 67,545 million US dollars in 2024. This continuous investment expansion indicates ongoing capital allocation possibly aimed at supporting business growth or capacity enhancement.
- Return on Invested Capital (ROIC)
- The ROIC showed a pattern of volatility across the analyzed years. It improved markedly from 5.84% in 2020 to a peak of nearly 30% in 2022, reflecting enhanced efficiency in utilizing invested capital during this period. Subsequently, ROIC decreased to 19.02% in 2023 and further to 13.07% in 2024, indicating a reduction in capital return efficiency despite rising invested capital.
Overall, the data presents a scenario of rapid profit growth up to 2022, accompanied by increasing capital investments. The decline in both NOPAT and ROIC in the later years may suggest challenges in maintaining operational profitability and capital efficiency as the company expands its asset base.
Decomposition of ROIC
Tesla 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 important trends over the five-year period under review. The operating profit margin (OPM) showed a substantial improvement from 8.5% in 2020 to a peak of 19.64% in 2022, indicating enhanced profitability, but then experienced a notable decline in the subsequent years, falling to 10.19% by 2024. This pattern suggests that while profitability increased significantly initially, there were challenges or increased costs impacting margins after 2022.
The turnover of capital (TO) exhibited a rising trend from 0.81 in 2020 to a high of 1.66 in 2022, reflecting more efficient use of capital assets to generate revenue. The metric remained relatively stable following 2022 but showed a slight decrease to 1.45 by 2024. This indicates that although capital utilization improved markedly and was maintained for a period, there was some reduction in efficiency in recent years.
The effective cash tax rate (represented here as 1 minus the tax rate) increased from 84.46% in 2020 to a peak of 91.76% in 2022, demonstrating a declining tax expense relative to earnings during this time. However, it decreased slightly afterward, though still remaining above 88% in 2024. This suggests that the tax burden was lower during the middle years but experienced a modest increase towards the end of the period.
Return on invested capital (ROIC) experienced a pronounced upward trajectory from 5.84% in 2020 to a high of 29.98% in 2022, reflecting strong value creation from the invested capital. After peaking, ROIC decreased to 13.07% by 2024, indicating reduced efficiency in generating returns from investments in the latest years compared to the peak period.
- Operating Profit Margin (OPM)
- Increased steadily until 2022, then declined, indicating initial growth in profitability followed by weakening margins.
- Turnover of Capital (TO)
- Improved significantly through 2022, stabilized, then showed slight reduction, suggesting capital was used efficiently but with some recent decline.
- Effective Cash Tax Rate (CTR)
- Improved (meaning tax expense lowered) through 2022, then slightly worsened but remained favorable relative to 2020.
- Return on Invested Capital (ROIC)
- Strong growth to 2022 peak, signifying enhanced capital returns, followed by a substantial decrease indicating less effective use of capital in the latest years.
Operating Profit Margin (OPM)
Tesla 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 | ||||||
| Ford Motor Co. | ||||||
| General Motors Co. | ||||||
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.
- Net Operating Profit Before Taxes (NOPBT)
- The net operating profit before taxes showed a strong upward trajectory from 2020 through 2022, increasing from $2,712 million to $16,209 million. However, in the subsequent years, a decline was observed, falling to $12,517 million in 2023 and further to $9,992 million in 2024. This indicates a peak in profitability in 2022 followed by a period of decreasing operational earnings.
- Adjusted Revenues
- Revenues displayed consistent growth over the first four years, rising from $31,908 million in 2020 to $98,337 million in 2023. In 2024, revenues slightly decreased to $98,060 million, showing a stabilization rather than continued growth. This pattern suggests strong expansion efforts that plateaued in the most recent year.
- Operating Profit Margin (OPM)
- The operating profit margin improved significantly from 8.5% in 2020 to a peak of 19.64% in 2022, indicating increased efficiency or profitability during that period. Thereafter, the margin contracted to 12.73% in 2023 and further to 10.19% in 2024, mirroring the decline in profitability and suggesting rising costs or pricing pressures impacting operational efficiency.
Turnover of Capital (TO)
Tesla Inc., TO calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenues | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| Ford Motor Co. | ||||||
| General Motors Co. | ||||||
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.
- Revenues
- The adjusted revenues show a significant upward trend from 2020 to 2023, increasing from 31,908 million US dollars to 98,337 million US dollars. This represents a more than threefold increase over the four-year period. However, there is a slight decline observed in 2024, with revenues decreasing marginally to 98,060 million US dollars.
- Invested Capital
- Invested capital has been steadily rising each year, from 39,217 million US dollars in 2020 to 67,545 million US dollars in 2024. The increase is consistent, indicating a continuous investment in assets or business expansion over the period analyzed.
- Turnover of Capital (TO)
- The turnover of capital ratio demonstrates an overall improvement from 0.81 in 2020 to a peak of 1.66 in 2022. It remains relatively stable in 2023 at 1.65 but declines to 1.45 in 2024. This pattern indicates increased efficiency in utilizing capital up to 2022, followed by a slight reduction in efficiency in the last reported year.
- Summary of Trends
- There is a clear growth trajectory in both revenues and invested capital over the period. Revenue growth outpaces the growth in capital investments until 2023, contributing to a higher capital turnover ratio. The slight decrease in both revenue and turnover of capital in 2024 suggests a potential plateau or minor setback in operational efficiency or market conditions affecting revenue generation despite continued capital investments.
Effective Cash Tax Rate (CTR)
Tesla 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 | ||||||
| Ford Motor Co. | ||||||
| General Motors Co. | ||||||
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.
- Cash Operating Taxes
- The cash operating taxes exhibited a consistent increase from 2020 to 2022, rising from $422 million to $1,335 million. However, this upward trend reversed slightly in the subsequent years, with cash operating taxes decreasing to $1,208 million in 2023 and further to $1,164 million in 2024.
- Net Operating Profit Before Taxes (NOPBT)
- The net operating profit before taxes demonstrated strong growth from 2020 through 2022, increasing substantially from $2,712 million to a peak of $16,209 million. Following this peak, the NOPBT declined in 2023 to $12,517 million and continued to decrease to $9,992 million in 2024, indicating a notable reduction in operating profitability in the latter periods.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate showed a declining trend from 15.54% in 2020 down to 8.24% in 2022, reflecting a decreasing tax burden relative to operating profit. However, from 2022 onwards, the CTR increased gradually to 9.65% in 2023 and further to 11.65% in 2024, suggesting a rising tax impact relative to cash operating profit in the recent periods.
- Overall Analysis
- The data reveals an initial phase of significant profitability growth accompanied by increasing tax payments but decreasing effective tax rates, potentially indicating improved tax efficiencies or incentives. Nevertheless, from 2023 onwards, both net operating profit and cash taxes declined, while the effective cash tax rate increased, which may imply reduced operating performance along with a relatively higher tax burden. This shift merits further investigation to understand underlying causes, such as changes in market conditions, cost structures, or tax policies impacting the financial outcomes.