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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Workday Inc. pages available for free this week:
- Statement of Comprehensive Income
- Balance Sheet: Assets
- Analysis of Solvency Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Geographic Areas
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Operating Profit Margin since 2013
- Return on Equity (ROE) since 2013
- Aggregate Accruals
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Return on Invested Capital (ROIC)
Workday Inc., ROIC calculation, comparison to benchmarks
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | |||||||
| Invested capital2 | |||||||
| Performance Ratio | |||||||
| ROIC3 | |||||||
| Benchmarks | |||||||
| ROIC, Competitors4 | |||||||
| Accenture PLC | |||||||
| Adobe Inc. | |||||||
| Cadence Design Systems Inc. | |||||||
| CrowdStrike Holdings Inc. | |||||||
| Fair Isaac Corp. | |||||||
| International Business Machines Corp. | |||||||
| Intuit Inc. | |||||||
| Microsoft Corp. | |||||||
| Oracle Corp. | |||||||
| Palantir Technologies Inc. | |||||||
| Palo Alto Networks Inc. | |||||||
| Salesforce Inc. | |||||||
| ServiceNow Inc. | |||||||
| Synopsys Inc. | |||||||
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
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.
- Net Operating Profit After Taxes (NOPAT)
- The net operating profit after taxes exhibits significant variability throughout the analyzed periods. Initially, there is a negative NOPAT of -113 million USD in the year ending January 31, 2020, indicating an operating loss. This situation reverses in 2021 with a positive NOPAT of 84 million USD, followed by a substantial increase to 506 million USD in 2022. In 2023, a pronounced decline occurs, lowering NOPAT to 102 million USD. However, the figure rebounds strongly in the following years, reaching 673 million USD in 2024 and 860 million USD in 2025. Overall, the trend suggests recovery from early losses, with fluctuations but culminating in robust profitability in the latest periods.
- Invested Capital
- Invested capital shows a consistent upward trend across the entire timeframe. Starting from 5,129 million USD in 2020, it increases steadily each year, reaching 6,061 million USD in 2021 and rising further to 7,706 million USD in 2022. Growth continues at a moderated pace to 8,178 million USD in 2023, then further to 8,631 million USD in 2024, and 9,420 million USD in 2025. This pattern reflects ongoing capital investment and expansion activities by the company over the six-year period.
- Return on Invested Capital (ROIC)
- ROIC experiences wide fluctuations during the analyzed years. It begins at a negative 2.21% in 2020, corresponding with the negative NOPAT that year, and improves to a positive 1.38% in 2021. A marked increase to 6.56% in 2022 follows, indicating improved efficiency and profitability. Subsequently, ROIC declines sharply to 1.25% in 2023, paralleling the drop in NOPAT. Thereafter, a stronger recovery occurs, with ROIC rising to 7.8% in 2024 and further to 9.13% in 2025. This behavior illustrates volatility but an overall improvement in generating returns from invested capital over time.
Decomposition of ROIC
Workday Inc., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Jan 31, 2025 | = | × | × | ||||
| Jan 31, 2024 | = | × | × | ||||
| Jan 31, 2023 | = | × | × | ||||
| Jan 31, 2022 | = | × | × | ||||
| Jan 31, 2021 | = | × | × | ||||
| Jan 31, 2020 | = | × | × |
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
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 exhibited a fluctuating yet overall improving trend over the analyzed period. Beginning with a negative margin of -2.53% in 2020, the margin turned positive at 2.23% in 2021 and rose sharply to 8.82% in 2022. Although there was a decline to 3.29% in 2023, the margin rebounded to 8.65% in 2024 and further increased to 10.08% in 2025. This indicates improved operational efficiency and profitability, despite a temporary setback in 2023.
- Turnover of Capital (TO)
- The turnover of capital remained relatively stable with minor variations throughout the six-year period. It started at 0.78 in 2020, slightly decreased to 0.77 in 2021 and 0.74 in 2022. From 2023 onwards, there was a steady increase reaching 0.82 in 2023, then 0.9 in 2024, and 0.94 in 2025. This upward trend in later years suggests enhanced efficiency in utilizing invested capital to generate revenue.
- Effective Cash Tax Rate (1 - CTR)
- This metric showed significant volatility over the period. Initially at 100% in 2020, it decreased to 80.75% in 2021, rose above 100% to 100.77% in 2022, then dropped sharply to 46.42% in 2023. Subsequently, it returned near 100%, with values of 100.43% in 2024 and 96.22% in 2025. Such fluctuations indicate varying cash tax burdens, with a notably favorable tax cash position in 2023 followed by a return to levels similar to earlier years.
- Return on Invested Capital (ROIC)
- The return on invested capital started in negative territory at -2.21% in 2020, improved to a positive 1.38% in 2021, and rose further to 6.56% in 2022. A decline occurred in 2023 to 1.25%, but the metric regained momentum in subsequent periods, reaching 7.8% in 2024 and 9.13% in 2025. The pattern mirrors that of the operating profit margin, indicating intermittent challenges but a strong recovery in generating returns from invested capital.
Operating Profit Margin (OPM)
Workday Inc., OPM calculation, comparison to benchmarks
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 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 unearned revenue | |||||||
| Adjusted revenues | |||||||
| Profitability Ratio | |||||||
| OPM3 | |||||||
| Benchmarks | |||||||
| OPM, Competitors4 | |||||||
| Accenture PLC | |||||||
| Adobe Inc. | |||||||
| Cadence Design Systems Inc. | |||||||
| CrowdStrike Holdings Inc. | |||||||
| Fair Isaac Corp. | |||||||
| International Business Machines Corp. | |||||||
| Intuit Inc. | |||||||
| Microsoft Corp. | |||||||
| Oracle Corp. | |||||||
| Palantir Technologies Inc. | |||||||
| Palo Alto Networks Inc. | |||||||
| Salesforce Inc. | |||||||
| ServiceNow Inc. | |||||||
| Synopsys Inc. | |||||||
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
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.
- Net Operating Profit Before Taxes (NOPBT)
- The net operating profit before taxes displayed a notable recovery and growth trend over the analyzed periods. Initially, there was a negative value of -101 million US dollars in early 2020, indicating an operating loss. However, this shifted to a positive and increasing trajectory starting in 2021 with 104 million US dollars, rising sharply to 502 million in 2022. Although there was a decline in 2023 to 219 million, the figure recovered significantly in the subsequent years, reaching 670 million in 2024 and 894 million in 2025, marking strong profit growth.
- Adjusted Revenues
- Adjusted revenues demonstrated consistent and robust growth throughout the period under review. The revenues increased steadily from 3,987 million US dollars in 2020 to 8,866 million US dollars in 2025. This upward trend reflects sustained business expansion and increasing sales or service income, with year-over-year growth each fiscal year.
- Operating Profit Margin (OPM)
- The operating profit margin followed a fluctuating yet overall positive trajectory. The margin started at a negative ratio of -2.53% in 2020, indicating operational inefficiencies or losses. This improved to a positive margin of 2.23% in 2021, then showed a significant increase to 8.82% in 2022. Despite a decrease to 3.29% in 2023, which suggests some operational challenges or increased costs, the margin rebounded strongly in 2024 and 2025, reaching 8.65% and 10.08%, respectively. The overall pattern suggests improving profitability and operational efficiency over time.
- Summary and Insights
- The data reveals a company that transitioned from operating losses to solid profitability between 2020 and 2025. Adjusted revenues showed steady growth, underpinning the increase in net operating profit and margins. The temporary dip in both NOPBT and OPM in 2023 may indicate specific operational or market challenges during that period, but the recovery and improvement in subsequent years reflect a resilient and effective business strategy. Improved operating profit margins, coupled with higher revenues and profits, indicate enhanced operational efficiency and strong financial health in the latter years.
Turnover of Capital (TO)
Workday Inc., TO calculation, comparison to benchmarks
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Revenues | |||||||
| Add: Increase (decrease) in unearned revenue | |||||||
| Adjusted revenues | |||||||
| Invested capital1 | |||||||
| Efficiency Ratio | |||||||
| TO2 | |||||||
| Benchmarks | |||||||
| TO, Competitors3 | |||||||
| Accenture PLC | |||||||
| Adobe Inc. | |||||||
| Cadence Design Systems Inc. | |||||||
| CrowdStrike Holdings Inc. | |||||||
| Fair Isaac Corp. | |||||||
| International Business Machines Corp. | |||||||
| Intuit Inc. | |||||||
| Microsoft Corp. | |||||||
| Oracle Corp. | |||||||
| Palantir Technologies Inc. | |||||||
| Palo Alto Networks Inc. | |||||||
| Salesforce Inc. | |||||||
| ServiceNow Inc. | |||||||
| Synopsys Inc. | |||||||
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
1 Invested capital. See details »
2 2025 Calculation
TO = Adjusted revenues ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
- Adjusted Revenues
- There is a consistent upward trend in adjusted revenues over the six-year period. Starting at 3,987 million US dollars in 2020, revenues increased annually, reaching 8,866 million US dollars by 2025. The year-over-year growth appears steady, indicating sustained business expansion and increasing sales performance.
- Invested Capital
- Invested capital also shows a continuous increase throughout the period, rising from 5,129 million US dollars in 2020 to 9,420 million US dollars in 2025. This steady growth in invested capital suggests ongoing investment in assets or capital projects, likely supporting the expansion and growing operational scale of the business.
- Turnover of Capital (TO)
- The turnover of capital ratio exhibits some fluctuation but generally trends upward. It starts at 0.78 in 2020, declines slightly to 0.74 in 2022, and then increases progressively to 0.94 by 2025. This suggests improving efficiency in using invested capital to generate revenues, particularly in the latter years, reflecting enhanced asset utilization or operational effectiveness.
Effective Cash Tax Rate (CTR)
Workday Inc., CTR calculation, comparison to benchmarks
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 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 | |||||||
| Accenture PLC | |||||||
| Adobe Inc. | |||||||
| Cadence Design Systems Inc. | |||||||
| CrowdStrike Holdings Inc. | |||||||
| Fair Isaac Corp. | |||||||
| International Business Machines Corp. | |||||||
| Intuit Inc. | |||||||
| Microsoft Corp. | |||||||
| Oracle Corp. | |||||||
| Palantir Technologies Inc. | |||||||
| Palo Alto Networks Inc. | |||||||
| Salesforce Inc. | |||||||
| ServiceNow Inc. | |||||||
| Synopsys Inc. | |||||||
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
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.
- Net Operating Profit Before Taxes (NOPBT)
- The net operating profit before taxes exhibited a significant positive trend over the analyzed periods. Beginning with a loss of 101 million US dollars in 2020, the figure shifted to a positive 104 million in 2021, followed by a sharp increase to 502 million in 2022. This was somewhat reduced to 219 million in 2023 but rebounded strongly reaching 670 million in 2024 and further rising to 894 million in 2025. Overall, the trend points to a substantial improvement in operational profitability.
- Cash Operating Taxes
- Cash operating taxes demonstrated considerable volatility throughout the periods. Starting at 13 million US dollars in 2020, taxes increased to 20 million in 2021, then declined sharply to a negative value of -4 million in 2022, indicating a possible tax credit or refund. A pronounced increase to 118 million occurred in 2023. This was followed again by a negative figure of -3 million in 2024, and an increase to 34 million in 2025. The fluctuation suggests varying tax payments possibly influenced by changes in taxable income, tax regulations, or adjustments.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate showed irregular and fluctuating behavior during the periods. It was absent in 2020. It registered a positive rate of 19.25% in 2021, but turned negative to -0.77% in 2022, corresponding with the negative cash operating taxes. A substantial spike to 53.58% was observed in 2023, aligning with the high cash tax payment for that year. Subsequently, the rate again became slightly negative at -0.43% in 2024 and rose modestly to 3.78% in 2025. These variations indicate inconsistency in tax expense relative to operating profit, reflecting the impact of tax credits, refunds, or other cash tax timing effects.