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3M Co. (NYSE:MMM)

Return on Capital (ROC)

Advanced level

Return on capital (ROC) is after tax rate of return on net business assets. ROIC is unaffected by changes in interest rates or company’s debt and equity structure. It measures business productivity performance.

Return on Invested Capital (ROIC)

3M Co., ROIC calculation

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 4,679  5,630  5,388  5,159  4,939 
Invested capital2 38,566  31,524  32,235  29,345  29,714 
Performance Ratio
ROIC3 12.13% 17.86% 16.71% 17.58% 16.62%

Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11).

1 NOPAT. See details »

2 Invested capital. See details »

3 2019 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 4,679 ÷ 38,566 = 12.13%

Performance ratio Description The company
ROIC A measure of the periodic, after tax, cash-on-cash yield earned in the business. 3M Co.’s ROIC improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.