Stock Analysis on Net

AbbVie Inc. (NYSE:ABBV)

Return on Capital (ROC)

Microsoft Excel

Return on Invested Capital (ROIC)

AbbVie Inc., ROIC calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 3,292 11,543 12,362 4,455 9,247
Invested capital2 68,204 82,134 95,922 103,725 62,749
Performance Ratio
ROIC3 4.83% 14.05% 12.89% 4.30% 14.74%
Benchmarks
ROIC, Competitors4
Amgen Inc. 11.15% 16.11% 15.93% 20.35% 22.74%
Bristol-Myers Squibb Co. 8.69% 6.37% 8.29% -7.57% 3.06%
Eli Lilly & Co. 10.52% 17.77% 19.28% 25.89% 22.93%
Gilead Sciences Inc. 11.75% 8.28% 14.43% 1.26% 12.92%
Johnson & Johnson 8.98% 14.12% 19.20% 13.91% 12.94%
Merck & Co. Inc. -1.02% 19.14% 18.87% 11.66% 18.52%
Pfizer Inc. -0.82% 28.01% 20.98% 5.87% 14.19%
Regeneron Pharmaceuticals Inc. 26.80% 29.90% 72.83% 44.66% 34.05%
Thermo Fisher Scientific Inc. 5.98% 7.76% 9.32% 10.70% 6.69%
Vertex Pharmaceuticals Inc. 19.93% 22.66% 23.86% 37.13% 27.57%

Based on: 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), 10-K (reporting date: 2019-12-31).

1 NOPAT. See details »

2 Invested capital. See details »

3 2023 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 3,292 ÷ 68,204 = 4.83%

4 Click competitor name to see calculations.

Performance ratio Description The company
ROIC A measure of the periodic, after tax, cash-on-cash yield earned in the business. AbbVie Inc. ROIC improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Decomposition of ROIC

AbbVie Inc., decomposition of ROIC

Microsoft Excel
ROIC = OPM1 × TO2 × 1 – CTR3
Dec 31, 2023 4.83% = 14.58% × 0.80 × 41.58%
Dec 31, 2022 14.05% = 26.77% × 0.71 × 74.28%
Dec 31, 2021 12.89% = 27.06% × 0.59 × 81.30%
Dec 31, 2020 4.30% = 13.19% × 0.44 × 73.76%
Dec 31, 2019 14.74% = 30.02% × 0.53 × 92.58%

Based on: 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), 10-K (reporting date: 2019-12-31).

1 Operating profit margin (OPM). See calculations »

2 Turnover of capital (TO). See calculations »

3 Effective cash tax rate (CTR). See calculations »

The primary reason for the decrease in return on invested capital (ROIC) over 2023 year is the decrease in profitability measured by operating profit margin (OPM) ratio.


Operating Profit Margin (OPM)

AbbVie Inc., OPM calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 3,292 11,543 12,362 4,455 9,247
Add: Cash operating taxes2 4,625 3,997 2,843 1,585 741
Net operating profit before taxes (NOPBT) 7,917 15,540 15,205 6,040 9,988
 
Net revenues 54,318 58,054 56,197 45,804 33,266
Profitability Ratio
OPM3 14.58% 26.77% 27.06% 13.19% 30.02%
Benchmarks
OPM, Competitors4
Amgen Inc. 40.00% 35.35% 32.55% 38.71% 46.69%
Bristol-Myers Squibb Co. 21.81% 19.38% 20.31% -12.65% 21.63%
Eli Lilly & Co. 20.00% 24.98% 22.91% 30.98% 24.91%
Gilead Sciences Inc. 29.07% 25.11% 34.43% 10.83% 27.94%
Johnson & Johnson 17.15% 22.65% 24.38% 20.16% 21.00%
Merck & Co. Inc. 4.63% 30.22% 30.60% 19.13% 26.21%
Pfizer Inc. 1.43% 38.86% 30.18% 19.53% 35.42%
Regeneron Pharmaceuticals Inc. 32.80% 40.59% 58.09% 46.15% 33.80%
Thermo Fisher Scientific Inc. 15.91% 18.33% 23.79% 24.12% 17.61%
Vertex Pharmaceuticals Inc. 38.69% 46.55% 36.91% 50.94% 33.47%

Based on: 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), 10-K (reporting date: 2019-12-31).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2023 Calculation
OPM = 100 × NOPBT ÷ Net revenues
= 100 × 7,917 ÷ 54,318 = 14.58%

4 Click competitor name to see calculations.

Profitability ratio Description The company
OPM The operating profit margin (OPM) is the ratio of pretax economic earnings, or NOPBT, to sales. AbbVie Inc. OPM deteriorated from 2021 to 2022 and from 2022 to 2023.

Turnover of Capital (TO)

AbbVie Inc., TO calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Net revenues 54,318 58,054 56,197 45,804 33,266
Invested capital1 68,204 82,134 95,922 103,725 62,749
Efficiency Ratio
TO2 0.80 0.71 0.59 0.44 0.53
Benchmarks
TO, Competitors3
Amgen Inc. 0.38 0.62 0.60 0.63 0.59
Bristol-Myers Squibb Co. 0.67 0.64 0.58 0.47 0.26
Eli Lilly & Co. 1.16 1.17 1.08 1.00 1.04
Gilead Sciences Inc. 0.59 0.59 0.57 0.48 0.70
Johnson & Johnson 0.86 0.83 0.95 0.84 0.85
Merck & Co. Inc. 0.86 0.80 0.69 0.84 0.87
Pfizer Inc. 0.38 0.91 0.93 0.40 0.43
Regeneron Pharmaceuticals Inc. 1.10 0.99 1.48 1.03 1.20
Thermo Fisher Scientific Inc. 0.50 0.54 0.49 0.53 0.49
Vertex Pharmaceuticals Inc. 0.75 0.68 0.81 0.76 0.85

Based on: 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), 10-K (reporting date: 2019-12-31).

1 Invested capital. See details »

2 2023 Calculation
TO = Net revenues ÷ Invested capital
= 54,318 ÷ 68,204 = 0.80

3 Click competitor name to see calculations.

Efficiency ratio Description The company
TO The turnover of capital (TO) is the ratio of sales to invested capital. Capital turnover is a function of the efficiency of working capital management and of net fixed assets. AbbVie Inc. TO improved from 2021 to 2022 and from 2022 to 2023.

Effective Cash Tax Rate (CTR)

AbbVie Inc., CTR calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 3,292 11,543 12,362 4,455 9,247
Add: Cash operating taxes2 4,625 3,997 2,843 1,585 741
Net operating profit before taxes (NOPBT) 7,917 15,540 15,205 6,040 9,988
Tax Rate
CTR3 58.42% 25.72% 18.70% 26.24% 7.42%
Benchmarks
CTR, Competitors4
Amgen Inc. 27.52% 27.01% 18.93% 15.91% 17.97%
Bristol-Myers Squibb Co. 40.21% 48.91% 29.34% 45.70%
Eli Lilly & Co. 54.68% 39.42% 22.30% 16.37% 11.34%
Gilead Sciences Inc. 31.23% 44.33% 25.84% 76.01% 34.29%
Johnson & Johnson 39.03% 25.17% 17.54% 17.72% 27.17%
Merck & Co. Inc. 125.66% 20.99% 10.42% 27.35% 19.04%
Pfizer Inc. 252.75% 20.44% 25.02% 25.53% 6.34%
Regeneron Pharmaceuticals Inc. 25.49% 25.84% 15.22% 5.72% 16.36%
Thermo Fisher Scientific Inc. 24.94% 21.94% 19.99% 15.79% 21.66%
Vertex Pharmaceuticals Inc. 30.87% 28.16% 19.91% 4.34% 3.62%

Based on: 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), 10-K (reporting date: 2019-12-31).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2023 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 4,625 ÷ 7,917 = 58.42%

4 Click competitor name to see calculations.

Tax rate Description The company
CTR Effective cash tax rate on operating income. AbbVie Inc. CTR increased from 2021 to 2022 and from 2022 to 2023.