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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- Income Statement
- Statement of Comprehensive Income
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Reportable Segments
- Enterprise Value to FCFF (EV/FCFF)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Debt to Equity since 2005
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Return on Invested Capital (ROIC)
Abbott Laboratories, 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 | ||||||
| CVS Health Corp. | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group 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.
Over the observed period from 2020 to 2024, several notable trends emerge regarding the company's profitability and capital efficiency.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT shows a significant increase from 4,838 million US dollars in 2020 to a peak of 7,014 million in 2021, indicating improved operational performance. However, a decline follows in 2022 to 6,718 million, with a sharper decrease in 2023 to 5,289 million. The figure modestly recovers to 5,601 million in 2024, though it remains below the 2021 peak.
- Invested Capital
- Invested capital remains relatively stable throughout the five years, fluctuating mildly between approximately 59,651 million and 62,076 million US dollars. The highest value appears in 2021 at 62,076 million, while the lowest recorded is 59,651 million in 2023. These minor changes suggest a consistent level of capital deployment in the business.
- Return on Invested Capital (ROIC)
- ROIC demonstrates a strong positive trajectory in 2021, rising sharply to 11.3% from 8.01% in 2020, reflecting enhanced capital efficiency. This high level slightly declines to 10.96% in 2022 but experiences a more pronounced drop to 8.87% in 2023, aligning with the decreases seen in NOPAT. A marginal improvement to 9.32% occurs in 2024, indicating a partial recovery in return on capital.
Overall, the data indicates that while the company achieved its highest operational profitability and capital returns in 2021, subsequent years showed a downward trend with some recovery in 2024. The invested capital base remained mostly stable, suggesting that the variations in NOPAT and ROIC were driven predominantly by changes in operational performance rather than shifts in capital investment levels.
Decomposition of ROIC
Abbott Laboratories, 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 notable increase from 16.05% in 2020 to a peak of 20.37% in 2021, indicating improved operational efficiency or pricing power during this period. It remained relatively stable at 20.24% in 2022 but then experienced a decline to 16.84% in 2023. There was a slight recovery in 2024, with the margin increasing to 17.23%, although it did not return to the higher levels seen in 2021 and 2022.
- Turnover of Capital (TO)
- The turnover of capital exhibited a gradual upward trend over the five-year period. Starting at 0.57 in 2020, it increased to 0.69 in 2021 and then to 0.71 in 2022, reflecting a more efficient use of capital to generate revenue. Although there was a minor dip to 0.67 in 2023, the ratio rose again to 0.70 in 2024, indicating an overall improvement in capital utilization.
- 1 – Effective Cash Tax Rate (CTR)
- This metric trended downward from 87.08% in 2020 to 79.95% in 2021 and further to 76.03% in 2022, suggesting a decrease in the effective cash tax burden or more favorable tax conditions. There was a slight increase to 78.33% in 2023, followed by a minor reduction to 77.5% in 2024, indicating some variability but generally a lower effective cash tax rate compared to the starting year.
- Return on Invested Capital (ROIC)
- The return on invested capital improved significantly from 8.01% in 2020 to 11.3% in 2021, showing enhanced profitability relative to invested capital. This was followed by a slight decline to 10.96% in 2022. The ROIC dropped more sharply to 8.87% in 2023 but showed a modest recovery to 9.32% in 2024. Overall, the trend points to fluctuations with peak performance in 2021 and partial recovery afterward.
Operating Profit Margin (OPM)
Abbott Laboratories, 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) | ||||||
| Net sales | ||||||
| Profitability Ratio | ||||||
| OPM3 | ||||||
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| CVS Health Corp. | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group 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 ÷ Net sales
= 100 × ÷ =
4 Click competitor name to see calculations.
The financial data reveals several notable trends in the company's operating performance and sales over a five-year period.
- Net operating profit before taxes (NOPBT)
- The NOPBT increased significantly from 5,556 million USD in 2020 to 8,772 million USD in 2021, showing strong profitability growth. It remained relatively stable in 2022 at 8,836 million USD but experienced a decline in 2023 down to 6,753 million USD. A slight recovery is observed in 2024 with an increase to 7,226 million USD, though still below the peak levels of 2021 and 2022.
- Net sales
- Net sales demonstrated a consistent upward trend from 34,608 million USD in 2020 to a peak of 43,653 million USD in 2022. However, a notable decrease occurred in 2023 to 40,109 million USD, followed by a modest rebound to 41,950 million USD in 2024. Despite the fluctuations, the overall trajectory indicates growth compared to the initial year.
- Operating profit margin (OPM)
- The operating profit margin improved from 16.05% in 2020 to above 20% in both 2021 (20.37%) and 2022 (20.24%), reflecting enhanced operational efficiency or profitability during those years. This margin decreased in 2023 to 16.84%, aligning with the decline in NOPBT and net sales, before slightly increasing to 17.23% in 2024. The margin remains below the peak levels but above the 2020 baseline.
Overall, the data indicates the company experienced strong growth and profitability in 2021 and 2022. The subsequent downturn in 2023 affected both sales and profitability, with a partial recovery noted in 2024. The operating profit margin trends suggest fluctuating operational efficiency or cost management impacts corresponding to these changes in profitability and sales volume.
Turnover of Capital (TO)
Abbott Laboratories, 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) | ||||||
| Net sales | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| CVS Health Corp. | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group 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 = Net sales ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
- Net Sales
- The net sales exhibit an overall upward trend from 2020 to 2024, increasing from 34,608 million USD in 2020 to 41,950 million USD in 2024. There was a significant jump between 2020 and 2021, rising by approximately 24.4%. After 2021, net sales showed minor fluctuations, with a slight increase from 43,653 million USD in 2022 to 42,109 million USD in 2023 representing a decline, followed by a recovery in 2024 to 41,950 million USD.
- Invested Capital
- Invested capital remained relatively stable throughout the observed periods, with a peak in 2021 at 62,076 million USD. Subsequently, invested capital gradually declined to 59,651 million USD in 2023 before slightly increasing again to 60,065 million USD in 2024. The overall variation across the five years is minor, indicating limited changes in the capital base.
- Turnover of Capital (TO)
- The turnover of capital ratio increased steadily from 0.57 in 2020 to 0.71 in 2022, indicating enhanced efficiency in generating sales from invested capital during this period. Although there was a slight dip to 0.67 in 2023, the ratio rebounded to 0.70 in 2024, maintaining a higher level than earlier years. This suggests improved utilization of invested capital over time despite minor fluctuations.
Effective Cash Tax Rate (CTR)
Abbott Laboratories, 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 | ||||||
| CVS Health Corp. | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group 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.
The financial data reveals several notable trends over the five-year period ending December 31, 2024.
- Cash Operating Taxes
- There is a general upward trend in cash operating taxes from 2020 to 2024, with values rising from 718 million US dollars in 2020 to a peak of 2,118 million in 2022, followed by a decline to 1,463 million in 2023 and a slight increase again to 1,626 million in 2024. This fluctuation indicates variability in tax payments despite generally higher levels compared to the starting year.
- Net Operating Profit Before Taxes (NOPBT)
- The net operating profit before taxes shows significant growth from 5,556 million US dollars in 2020 to 8,836 million in 2022. Subsequently, a sharp decline occurs in 2023 to 6,753 million, with a marginal recovery to 7,226 million in 2024. This pattern suggests that profitability strengthened considerably until 2022, followed by some operational challenges or external factors impacting profitability in the following two years.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate increases steadily from 12.92% in 2020 to 23.97% in 2022, before slightly decreasing to 21.67% in 2023 and slightly rising to 22.5% in 2024. This indicates a general rise in the proportion of cash taxes paid relative to net operating profit before taxes during the period, stabilizing somewhat after 2022.
Overall, the data illustrates a period of growing operating profits up to 2022, accompanied by rising tax expenses and tax rates. However, a downturn in operating profit in 2023 and 2024 contrasts with a persistent relatively high effective cash tax rate, suggesting that while profitability declined, tax efficiency or tax liabilities remained elevated during these years.