Microsoft Excel LibreOffice Calc

Return on Capital (ROC)

Difficulty: Advanced

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

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Net operating profit after taxes (NOPAT)1 5,302  5,162  4,941  4,899  4,739 
Invested capital2 32,207  29,390  29,760  24,519  26,154 
Ratio
ROIC3 16.46% 17.56% 16.60% 19.98% 18.12%

Source: Based on data from 3M Co. Annual Reports

2017 Calculations

1 NOPAT. See Details »

2 Invested capital. See Details »

3 ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 5,302 ÷ 32,207 = 16.46%

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 2015 to 2016 but then deteriorated significantly from 2016 to 2017.