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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Altria Group Inc. pages available for free this week:
- Balance Sheet: Assets
- Common-Size Balance Sheet: Assets
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Present Value of Free Cash Flow to Equity (FCFE)
- Total Asset Turnover since 2005
- Analysis of Debt
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Return on Invested Capital (ROIC)
Altria Group Inc., ROIC calculation, comparison to benchmarks
| 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 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| ROIC3 | ||||||
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
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 × ÷ =
4 Click competitor name to see calculations.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT demonstrated a substantial recovery and growth over the observed period. In 2019, the company experienced a negative NOPAT of -$482 million, indicating operational losses. However, there was a marked improvement in 2020, with NOPAT reaching $5,245 million, which was followed by a decline in 2021 to $2,233 million. The upward trend resumed in subsequent years, with NOPAT increasing to $5,753 million in 2022 and further to $8,681 million in 2023, indicating enhanced profitability and operational efficiency in recent years.
- Invested Capital
- Invested capital showed a consistent downward trend throughout the period. Beginning at $42,624 million in 2019, it decreased to $41,498 million in 2020, then declined more sharply to $33,524 million in 2021. This decreasing pattern continued in the two subsequent years, reaching $28,802 million in 2022 and slightly less at $28,647 million in 2023. This reduction in invested capital suggests a possible divestment of assets, improved capital efficiency, or a strategic repositioning of investments.
- Return on Invested Capital (ROIC)
- The ROIC exhibited a positive and strengthening trajectory over the period. Initially negative at -1.13% in 2019, it rose sharply to 12.64% in 2020, declined to 6.66% in 2021, then significantly improved to 19.97% in 2022, and attained 30.3% in 2023. This upward trend in ROIC reflects increasingly effective use of invested capital to generate profits, correlating with the recovery and growth seen in NOPAT and the reduction in invested capital. The notable rise in ROIC towards the end of the period signals enhanced operational performance and capital allocation efficiency.
Decomposition of ROIC
Altria Group Inc., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2023 | = | × | × | ||||
| Dec 31, 2022 | = | × | × | ||||
| Dec 31, 2021 | = | × | × | ||||
| Dec 31, 2020 | = | × | × | ||||
| Dec 31, 2019 | = | × | × |
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 »
- Operating Profit Margin (OPM)
- The operating profit margin exhibited significant fluctuations over the analyzed periods. It began at a modest 7.75% in 2019, then sharply increased to 30.97% in 2020. This was followed by a decrease to 19.17% in 2021, before climbing to 34.06% in 2022 and reaching its highest level at 48.67% in 2023. The general trend shows substantial improvement in profitability efficiency, especially from 2022 onwards.
- Turnover of Capital (TO)
- Turnover of capital showed a steady upward trajectory from 0.59 in 2019 to 0.87 in 2022, indicating improved utilization of capital to generate revenues. However, in 2023, a slight decline to 0.85 is observed, though it remains close to the prior year's level, suggesting a relatively stable efficiency in asset usage in the most recent year.
- 1 – Effective Cash Tax Rate (CTR)
- The metric measuring one minus the effective cash tax rate showed substantial variability. Beginning with a negative value of -24.76% in 2019, it increased dramatically to 64.76% in 2020, then decreased to 44.78% in 2021. Subsequently, it rose to 67.31% in 2022 and further to 72.85% in 2023. The general upward trend from 2020 to 2023 suggests an increasing proportion of pre-tax income retained after cash taxes, indicating improved tax efficiency or changes in tax structures.
- Return on Invested Capital (ROIC)
- Return on invested capital demonstrated considerable improvement over the timeframe. Starting from a negative return of -1.13% in 2019, it increased markedly to 12.64% in 2020. This was followed by a decline to 6.66% in 2021, then a substantial increase to 19.97% in 2022, and a further rise to 30.3% in 2023. This pattern reflects a strengthening ability to generate returns on capital investments, with notable recovery and growth after the 2019 baseline.
Operating Profit Margin (OPM)
Altria Group Inc., OPM calculation, comparison to benchmarks
| 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 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Net revenues | ||||||
| Profitability Ratio | ||||||
| OPM3 | ||||||
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
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 × ÷ =
4 Click competitor name to see calculations.
- Net Operating Profit Before Taxes (NOPBT)
- The NOPBT demonstrated significant fluctuation over the five-year period. Starting at $1,946 million in 2019, it surged sharply to $8,099 million in 2020, marking a more than fourfold increase. However, in 2021, it declined to $4,986 million, before rising again to $8,547 million in 2022 and further increasing to $11,917 million in 2023. Overall, the trend shows a strong recovery and growth after the temporary dip in 2021.
- Net Revenues
- Net revenues remained relatively stable, with a slight downward trend. The figures hovered around the $25 billion mark, peaking at $26,153 million in 2020 and gradually decreasing thereafter to $24,483 million in 2023. This reflects a modest decline of approximately 6.4% from the peak in 2020 to the end of the period.
- Operating Profit Margin (OPM)
- The operating profit margin exhibited notable volatility but an overall strong upward trajectory. Beginning at 7.75% in 2019, the margin increased significantly to 30.97% in 2020, indicating much improved operational efficiency or profitability. It then decreased to 19.17% in 2021, before rising sharply again to 34.06% in 2022 and reaching an impressive 48.67% in 2023. This pattern suggests effective cost control and enhanced profit-generation capabilities, especially in the latter years.
Turnover of Capital (TO)
Altria Group Inc., TO calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net revenues | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
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
= ÷ =
3 Click competitor name to see calculations.
- Net Revenues
- Net revenues exhibited a fluctuating trend over the observed period. Starting at 25,110 million US dollars in 2019, revenues increased to 26,153 million in 2020, showing a growth phase. However, from 2021 onwards, there was a gradual decline, reaching 24,483 million by 2023. This indicates a reduction in revenue generation after the peak in 2020.
- Invested Capital
- Invested capital showed a consistent downward trend throughout the period. It began at 42,624 million US dollars in 2019 and decreased steadily each year to settle at 28,647 million in 2023. This significant reduction suggests a strategic divestment or operational downsizing affecting the level of capital employed.
- Turnover of Capital (TO)
- The turnover of capital ratio, which measures the efficiency in using invested capital to generate revenues, improved markedly over the years. Starting from 0.59 in 2019, it rose steadily to reach a peak of 0.87 in 2022, before a slight decline to 0.85 in 2023. This indicates an enhanced capital efficiency despite the decrease in absolute revenue and invested capital values.
- Insights
- Overall, while net revenues declined in the latter years, the company optimized the use of its invested capital, as evidenced by the increasing capital turnover ratio. The reduction in invested capital may have contributed to this efficiency improvement. The data reflects a possible strategic focus on capital efficiency and cost management in response to decreasing revenue trends.
Effective Cash Tax Rate (CTR)
Altria Group Inc., CTR calculation, comparison to benchmarks
| 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 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Tax Rate | ||||||
| CTR3 | ||||||
| Benchmarks | ||||||
| CTR, Competitors4 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
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 Click competitor name to see calculations.
- Cash Operating Taxes
- The cash operating taxes demonstrated an overall increasing trend from 2019 to 2023. Starting at $2,428 million in 2019, the figure rose modestly to $2,854 million in 2020, followed by a slight decline to $2,753 million in 2021. Subsequently, the amount increased again each year, reaching $2,794 million in 2022 and a more significant rise to $3,236 million in 2023.
- Net Operating Profit Before Taxes (NOPBT)
- The net operating profit before taxes showed considerable volatility over the period. It began at $1,946 million in 2019 and experienced a substantial surge to $8,099 million in 2020, followed by a marked decrease to $4,986 million in 2021. After this decline, there was a strong recovery with profits rising again to $8,547 million in 2022 and reaching a peak of $11,917 million in 2023. This pattern indicates significant fluctuations but a strong upward trajectory by the end of the timeframe.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate exhibited a marked decreasing trend across the period. It started extremely high at 124.76% in 2019, indicating tax payments exceeding the operating profit before taxes, possibly due to prior year adjustments or tax credits. Following this, there was a sharp decline to 35.24% in 2020. The rate then increased to 55.22% in 2021, before steadily decreasing in the two subsequent years to 32.69% in 2022 and further down to 27.15% in 2023. The overall decline suggests improved tax efficiency or changes in taxable income relative to cash taxes paid.