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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United Airlines Holdings Inc. pages available for free this week:
- Common-Size Balance Sheet: Assets
- Analysis of Profitability Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Return on Equity (ROE) since 2005
- Current Ratio since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
- Aggregate Accruals
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Return on Invested Capital (ROIC)
United Airlines Holdings 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 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Parcel Service 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.
- Net Operating Profit After Taxes (NOPAT)
- The net operating profit after taxes exhibited a significant improvement over the observed period. Initially, there was a substantial negative figure of -7,141 million US dollars at the end of 2020, indicating a period of loss. This loss drastically decreased to -797 million by the end of 2021. Subsequently, the company transitioned to positive results, with NOPAT rising to 2,682 million in 2022, further increasing to 4,823 million in 2023, and reaching 5,148 million in 2024. This trend reflects a strong recovery and growth in operating profitability over the five-year span.
- Invested Capital
- Invested capital showed fluctuating levels during the period. Starting from 46,438 million US dollars in 2020, it increased to 52,534 million in 2021, then decreased markedly to 41,357 million in 2022. Following this decline, invested capital rose again to 45,532 million in 2023 and continued to recover to 49,435 million in 2024. This indicates some variability in the amount of capital the company allocated or maintained, with a notable dip in 2022 before recovering in subsequent years.
- Return on Invested Capital (ROIC)
- The return on invested capital improved markedly from a deeply negative position of -15.38% in 2020 to -1.52% in 2021. In 2022, ROIC turned positive, reaching 6.49%, and continued its upward trajectory to 10.59% in 2023, slightly decreasing to 10.41% in 2024. This pattern suggests a strong enhancement in capital efficiency and profitability, corresponding with the turnaround in net operating profit during the same timeframe.
Decomposition of ROIC
United Airlines Holdings 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 »
- Operating Profit Margin (OPM)
- The operating profit margin showed a substantial improvement over the period. It started at a significantly negative level of -42.95% in 2020, reflecting considerable operating losses. By 2021, the margin nearly broke even at -1.7%. In subsequent years, the margin turned positive and demonstrated steady growth, reaching 6.69% in 2022, 9.41% in 2023, and slightly increasing to 9.48% in 2024. This trend indicates a successful recovery and enhanced operational efficiency over the examined timeframe.
- Turnover of Capital (TO)
- The turnover of capital ratio exhibited a consistent upward trend from 2020 through 2023, rising from 0.35 to 1.19. This increase suggests a progressive improvement in the company's efficiency in utilizing its capital to generate revenue. In 2024, the ratio slightly decreased to 1.16 but remained near the higher levels seen in the previous year, indicating sustained operational effectiveness.
- 1 – Effective Cash Tax Rate (CTR)
- The metric representing one minus the effective cash tax rate, which correlates inversely with cash taxes paid, began at 100% in both 2020 and 2021, indicating no cash taxes were paid during those years. From 2022 onwards, a decline to values in the high 80s and mid-90s percent range was observed (88.41% in 2022, 94.63% in 2023, and 94.71% in 2024). This decline implies the company began incurring cash tax obligations starting in 2022 but still benefited from relatively low effective cash tax rates.
- Return on Invested Capital (ROIC)
- ROIC mirrored the recovery trend observed in operating profitability. The company experienced negative returns on invested capital in 2020 and 2021 at -15.38% and -1.52%, respectively, indicating losses relative to the invested funds. A turnaround occurred from 2022 onward, with ROIC becoming positive and progressively increasing to 6.49% in 2022, peaking at 10.59% in 2023, and slightly declining to 10.41% in 2024. The overall improvement signifies enhanced value creation from invested capital over time.
Operating Profit Margin (OPM)
United Airlines Holdings 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) | ||||||
| Operating revenue | ||||||
| Add: Increase (decrease) in frequent flyer deferred revenue | ||||||
| Adjusted operating revenue | ||||||
| Profitability Ratio | ||||||
| OPM3 | ||||||
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Parcel Service 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 operating revenue
= 100 × ÷ =
4 Click competitor name to see calculations.
- Net Operating Profit Before Taxes (NOPBT)
- The net operating profit before taxes exhibited a significant improvement over the five-year span. Starting with a substantial loss of 6,896 million USD in 2020, the value moved closer to break-even in 2021 with a loss of 424 million USD. Subsequently, it transitioned to positive territory in 2022, reaching 3,034 million USD. The upward trend continued with 5,097 million USD in 2023 and slightly increased to 5,436 million USD in 2024, indicating a robust recovery and sustained profitability growth.
- Adjusted Operating Revenue
- Adjusted operating revenue demonstrated a consistent and strong upward trajectory over the period. Revenue increased from 16,054 million USD in 2020 to 24,941 million USD in 2021, representing a notable recovery phase. From 2022 onwards, revenue nearly doubled reaching 45,348 million USD, then rose further to 54,185 million USD in 2023, and finally to 57,361 million USD in 2024. This pattern highlights strong revenue growth, likely reflecting improved market conditions or operational expansion.
- Operating Profit Margin (OPM)
- The operating profit margin followed a marked improvement pattern in parallel with operating profit growth. Beginning with a significant negative margin of -42.95% in 2020, it improved dramatically to -1.7% in 2021, nearly achieving break-even. Positive margins were recorded from 2022 onwards, starting at 6.69%, increasing to 9.41% in 2023, and slightly rising to 9.48% in 2024. This evolution signals enhanced operational efficiency and profitability relative to revenue.
Turnover of Capital (TO)
United Airlines Holdings 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) | ||||||
| Operating revenue | ||||||
| Add: Increase (decrease) in frequent flyer deferred revenue | ||||||
| Adjusted operating revenue | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Parcel Service 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 operating revenue ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
- Adjusted Operating Revenue
- The adjusted operating revenue demonstrated a significant and consistent upward trend over the analyzed periods. Starting at 16,054 million USD in 2020, it increased by more than 50% to 24,941 million USD in 2021. This growth accelerated in subsequent years, reaching 45,348 million USD in 2022 and continuing to expand to 54,185 million USD in 2023. The rise persisted into 2024, with revenue reaching 57,361 million USD. This indicates strong revenue growth momentum throughout the period.
- Invested Capital
- The invested capital displayed fluctuations rather than steady growth. From 46,438 million USD in 2020, it increased moderately to 52,534 million USD in 2021. However, in 2022, it saw a considerable decline to 41,357 million USD. Following this decrease, the invested capital partially recovered to 45,532 million USD in 2023 and further increased to 49,435 million USD in 2024. Overall, the capital base showed volatility with a dip in the middle years and subsequent recovery.
- Turnover of Capital (TO)
- The turnover of capital ratio, which measures efficiency in using invested capital to generate revenue, revealed notable improvement during the period. It rose steadily from 0.35 in 2020 to 0.47 in 2021. Thereafter, it more than doubled to 1.1 in 2022 and continued increasing slightly to 1.19 in 2023. In 2024, it slightly decreased to 1.16 but remained substantially higher than earlier years. This pattern suggests enhanced capital utilization and operational efficiency over time.
Effective Cash Tax Rate (CTR)
United Airlines Holdings 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 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Parcel Service 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.
- Cash operating taxes
- The cash operating taxes paid show variability over the years. The amount increased significantly from 246 million in 2020 to a peak of 374 million in 2021. This was followed by a slight decline to 352 million in 2022, then a more pronounced decrease to 274 million in 2023, and a slight increase again to 288 million in 2024. Overall, the trend indicates fluctuations with notable peaks and troughs.
- Net operating profit before taxes (NOPBT)
- NOPBT exhibited a marked recovery trend across the analyzed period. It began with a substantial loss of 6896 million in 2020, improving drastically to a much smaller loss of 424 million in 2021. In 2022, the figure turned positive at 3034 million, followed by continued growth to 5097 million in 2023 and 5436 million in 2024. This reflects a strong turnaround in profitability before taxes over the five-year span.
- Effective cash tax rate (CTR)
- The effective cash tax rate data is available only from 2022 onwards. In 2022, the rate stood at 11.59%, then decreased notably to 5.37% in 2023 and remained relatively stable at 5.29% in 2024. This downward trend suggests improved tax efficiency or the impact of changes in taxable income or tax regulations during the later years.