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.
Return on Invested Capital (ROIC)
AmerisourceBergen Corp., ROIC calculation, comparison to benchmarks
| Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net operating profit after taxes (NOPAT)1 | 2,392,410) | 1,778,708) | (4,619,749) | 1,185,025) | 1,018,004) | 771,526) | |
| Invested capital2 | 13,020,519) | 12,902,673) | 7,128,161) | 12,346,959) | 12,285,847) | 10,870,238) | |
| Performance Ratio | |||||||
| ROIC3 | 18.37% | 13.79% | -64.81% | 9.60% | 8.29% | 7.10% | |
| Benchmarks | |||||||
| ROIC, Competitors4 | |||||||
| Abbott Laboratories | 10.96% | 11.30% | 8.01% | — | — | — | |
| Elevance Health Inc. | 10.24% | 11.26% | 8.37% | — | — | — | |
| Intuitive Surgical Inc. | 22.01% | 37.63% | 25.62% | — | — | — | |
| Medtronic PLC | 7.02% | 5.59% | 6.20% | — | — | — | |
| UnitedHealth Group Inc. | 13.68% | 13.51% | 13.84% | — | — | — | |
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
1 NOPAT. See details »
2 Invested capital. See details »
3 2022 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 2,392,410 ÷ 13,020,519 = 18.37%
4 Click competitor name to see calculations.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT exhibited a positive growth trend from 2017 to 2019, increasing from approximately 771.5 million to 1.185 billion US dollars. There was a significant and unusual decline in 2020, showing a negative value of about -4.62 billion US dollars. Following this sharp downturn, the NOPAT recovered substantially in 2021 and 2022, reaching 1.78 billion and 2.39 billion US dollars, respectively, indicating a strong rebound and improvement in operating profitability over the last two years.
- Invested Capital
- Invested capital demonstrated a generally increasing trend from 2017 through 2019, rising from 10.87 billion to approximately 12.35 billion US dollars. In 2020, there was a marked decrease to around 7.13 billion US dollars, suggesting a significant reduction in invested resources during that period. This contraction was followed by a recovery phase in 2021 and 2022, where invested capital increased back to roughly 12.9 billion and 13.02 billion US dollars, respectively, indicating a restoration of investment levels closer to or slightly above pre-2020 figures.
- Return on Invested Capital (ROIC)
- The ROIC metric reflected an improving profitability relative to invested capital from 2017 to 2019, increasing from 7.1% to 9.6%. In 2020, ROIC plummeted dramatically to -64.81%, consistent with the negative NOPAT and decreased invested capital, indicating a highly inefficient use of capital during this period. Subsequent years saw a recovery in ROIC, with percentages rising to 13.79% in 2021 and further to 18.37% in 2022, demonstrating improved operational performance and capital efficiency.
- Overall Analysis
- The data reveals a notable disruption in financial performance in 2020, characterized by a sharp decline in NOPAT, invested capital, and ROIC, likely attributable to extraordinary circumstances affecting operations. The subsequent rapid recovery and growth in key profitability and capital efficiency metrics in 2021 and 2022 suggest effective management responses and a restoration of business fundamentals. The overall trend from 2017 to 2022 portrays a company capable of weathering significant challenges and returning to strong performance levels.
Decomposition of ROIC
AmerisourceBergen Corp., decomposition of ROIC
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
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 moderate fluctuations from 2017 to 2019, remaining below 1% and peaking at 0.85% in 2018. A substantial decline occurred in 2020, with the margin turning negative to -2.6%, indicating operational challenges during that period. However, a recovery followed in the subsequent two years, with margins rising to 1.01% in 2021 and further to 1.16% in 2022, suggesting improved operational efficiency and profitability.
- Turnover of Capital (TO)
- The turnover of capital was relatively stable from 2017 to 2019, fluctuating slightly between approximately 13.67 and 14.55. An exceptional spike occurred in 2020, with the ratio reaching 26.64, potentially reflecting significant changes in asset utilization or capital restructuring. Post this spike, the ratio declined but remained elevated compared to the pre-2020 period, recording 16.58 in 2021 and increasing to 18.32 in 2022, indicating enhanced capital efficiency relative to the earlier years.
- 1 – Effective Cash Tax Rate (CTR)
- This metric remained relatively high throughout the period, ranging from approximately 71.6% to 90.72% between 2017 and 2019. In 2020, the value reached 100%, possibly indicating that all taxable income was offset by taxes paid or deferred. Subsequent years saw a decline to 82.18% in 2021, followed by a slight increase to 86.56% in 2022, which may suggest fluctuating tax strategies or different taxable income profiles over time.
- Return on Invested Capital (ROIC)
- The return on invested capital showed an upward trend from 7.1% in 2017 to 9.6% in 2019, indicating improving returns. However, there was a dramatic drop to -64.81% in 2020, reflecting a significant impairment or loss in invested capital returns during that year. The subsequent two years exhibited a strong recovery with ROIC moving to 13.79% in 2021 and further increasing to 18.37% in 2022, signaling a robust rebound in capital efficiency and profitability.
Operating Profit Margin (OPM)
AmerisourceBergen Corp., OPM calculation, comparison to benchmarks
| Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net operating profit after taxes (NOPAT)1 | 2,392,410) | 1,778,708) | (4,619,749) | 1,185,025) | 1,018,004) | 771,526) | |
| Add: Cash operating taxes2 | 371,488) | 385,676) | (316,612) | 121,219) | 403,869) | 288,588) | |
| Net operating profit before taxes (NOPBT) | 2,763,899) | 2,164,384) | (4,936,361) | 1,306,244) | 1,421,873) | 1,060,114) | |
| Revenue | 238,587,006) | 213,988,843) | 189,893,926) | 179,589,121) | 167,939,635) | 153,143,826) | |
| Profitability Ratio | |||||||
| OPM3 | 1.16% | 1.01% | -2.60% | 0.73% | 0.85% | 0.69% | |
| Benchmarks | |||||||
| OPM, Competitors4 | |||||||
| Abbott Laboratories | 20.24% | 20.37% | 16.05% | — | — | — | |
| Elevance Health Inc. | 5.64% | 6.58% | 5.88% | — | — | — | |
| Intuitive Surgical Inc. | 26.19% | 33.56% | 28.14% | — | — | — | |
| Medtronic PLC | 19.15% | 16.48% | 17.88% | — | — | — | |
| UnitedHealth Group Inc. | 9.13% | 8.33% | 9.15% | — | — | — | |
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2022 Calculation
OPM = 100 × NOPBT ÷ Revenue
= 100 × 2,763,899 ÷ 238,587,006 = 1.16%
4 Click competitor name to see calculations.
- Revenue Trend
- Revenue exhibited a consistent upward trend throughout the periods under review, increasing steadily from approximately 153.1 billion US dollars in 2017 to 238.6 billion US dollars in 2022. This reflects sustained growth in the company’s top-line performance over the six-year span.
- Net Operating Profit Before Taxes (NOPBT) Trend
- The NOPBT showed variability with an initial increase from about 1.06 billion US dollars in 2017 to a peak near 1.42 billion in 2018, followed by a moderate decline in 2019. A significant downturn occurred in 2020, with NOPBT falling sharply into negative territory at approximately -4.94 billion US dollars, indicating a substantial operating loss. However, a strong recovery followed in 2021 and 2022, with NOPBT returning to positive figures of approximately 2.16 billion and 2.76 billion US dollars respectively.
- Operating Profit Margin (OPM) Trend
- The operating profit margin maintained a generally low but positive level between 2017 and 2019, ranging from 0.69% to 0.85%. In 2020, the margin dropped significantly to -2.6%, reflecting the operating loss experienced during that year. Thereafter, the margin improved to exceed 1% in both 2021 and 2022, reaching 1.16% by the end of the period, suggesting improved operational efficiency or profitability relative to revenue.
- Overall Insights
- The data illustrate a company experiencing consistent revenue growth alongside volatility in profitability between 2017 and 2022. The substantial loss in 2020, both in absolute net operating profit and margin percentage, likely points to extraordinary challenges or expenses that year. The recovery in the following two years denotes a positive turnaround, with profitability metrics improving despite already high revenue levels. The operating profit margin remains relatively low, indicating tight profit margins in the company’s operations even after recovery.
Turnover of Capital (TO)
AmerisourceBergen Corp., TO calculation, comparison to benchmarks
| Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Revenue | 238,587,006) | 213,988,843) | 189,893,926) | 179,589,121) | 167,939,635) | 153,143,826) | |
| Invested capital1 | 13,020,519) | 12,902,673) | 7,128,161) | 12,346,959) | 12,285,847) | 10,870,238) | |
| Efficiency Ratio | |||||||
| TO2 | 18.32 | 16.58 | 26.64 | 14.55 | 13.67 | 14.09 | |
| Benchmarks | |||||||
| TO, Competitors3 | |||||||
| Abbott Laboratories | 0.71 | 0.69 | 0.57 | — | — | — | |
| Elevance Health Inc. | 2.33 | 2.14 | 2.13 | — | — | — | |
| Intuitive Surgical Inc. | 1.16 | 1.27 | 0.98 | — | — | — | |
| Medtronic PLC | 0.46 | 0.42 | 0.41 | — | — | — | |
| UnitedHealth Group Inc. | 1.95 | 2.04 | 1.96 | — | — | — | |
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
1 Invested capital. See details »
2 2022 Calculation
TO = Revenue ÷ Invested capital
= 238,587,006 ÷ 13,020,519 = 18.32
3 Click competitor name to see calculations.
- Revenue Trends
- The revenue demonstrates a consistent upward trajectory over the six-year period. Starting from approximately $153.1 billion in 2017, it has steadily increased each year, reaching approximately $238.6 billion by 2022. This indicates robust growth in the company's sales or operational income, with notable increments between 2020 and 2021, and continuing into 2022.
- Invested Capital Trends
- Invested capital shows more variability. It increased gradually from about $10.9 billion in 2017 to around $12.3 billion in 2019 but then experienced a significant decline in 2020 to approximately $7.1 billion. Following this drop, invested capital rebounded in 2021 to about $12.9 billion and slightly increased again in 2022 to $13.0 billion. This fluctuation suggests possible divestments, asset disposals, or changes in capital structure around 2020, followed by reinvestment or capital replenishment subsequent years.
- Turnover of Capital (TO) Analysis
- The turnover of capital ratio reflects the efficiency of capital utilization in generating revenue. It remained relatively stable around 13.7 to 14.6 from 2017 to 2019. There was a sharp increase in 2020, peaking at 26.64, coinciding with the decline in invested capital. This suggests a temporary improvement in capital efficiency, likely due to the lowered capital base coupled with increasing revenue. However, in 2021 and 2022, the ratio decreased to 16.58 and 18.32, respectively, indicating that while efficiency moderated, it remained above pre-2020 levels.
- Overall Insights
- The company experienced stable revenue growth throughout the period, underscoring sustained business expansion. The marked decline in invested capital in 2020, accompanied by a spike in capital turnover, indicates a significant change in asset deployment or financial strategy during that year. Despite reinvestment in capital after 2020, the turnover ratios suggest that capital efficiency improved compared to the pre-2020 period. This combination of improved revenue and better capital utilization points to enhanced operational performance and possibly more strategic capital management in recent years.
Effective Cash Tax Rate (CTR)
AmerisourceBergen Corp., CTR calculation, comparison to benchmarks
| Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net operating profit after taxes (NOPAT)1 | 2,392,410) | 1,778,708) | (4,619,749) | 1,185,025) | 1,018,004) | 771,526) | |
| Add: Cash operating taxes2 | 371,488) | 385,676) | (316,612) | 121,219) | 403,869) | 288,588) | |
| Net operating profit before taxes (NOPBT) | 2,763,899) | 2,164,384) | (4,936,361) | 1,306,244) | 1,421,873) | 1,060,114) | |
| Tax Rate | |||||||
| CTR3 | 13.44% | 17.82% | — | 9.28% | 28.40% | 27.22% | |
| Benchmarks | |||||||
| CTR, Competitors4 | |||||||
| Abbott Laboratories | 23.97% | 20.05% | 12.92% | — | — | — | |
| Elevance Health Inc. | 22.01% | 20.22% | 33.27% | — | — | — | |
| Intuitive Surgical Inc. | 27.40% | 11.76% | 6.67% | — | — | — | |
| Medtronic PLC | 19.53% | 18.59% | 14.72% | — | — | — | |
| UnitedHealth Group Inc. | 23.25% | 20.32% | 22.88% | — | — | — | |
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2022 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 371,488 ÷ 2,763,899 = 13.44%
4 Click competitor name to see calculations.
- Cash operating taxes
- Cash operating taxes exhibited notable fluctuations throughout the analyzed periods. Starting from approximately $289 million in 2017, there was a steady increase reaching a peak near $404 million in 2018. A sharp decline occurred in 2019 with cash operating taxes dropping to about $121 million, followed by a significant negative value in 2020 near -$317 million, indicating possible tax refunds or adjustments. Subsequently, cash operating taxes reverted to positive figures in 2021 and 2022, with values of approximately $386 million and $371 million respectively, demonstrating a recovery towards previous levels.
- Net operating profit before taxes (NOPBT)
- NOPBT showed substantial variability across the years. It increased from roughly $1.06 billion in 2017 to a high of about $1.42 billion in 2018, then decreased to approximately $1.31 billion in 2019. A dramatic downturn occurred in 2020, where NOPBT fell sharply to a negative $4.94 billion, signaling a significant operating loss. Recovery was evident in 2021 and 2022, with NOPBT rising to approximately $2.16 billion and $2.76 billion respectively, indicating a rebound to profitability exceeding prior highs.
- Effective cash tax rate (CTR)
- The effective cash tax rate displayed a generally declining trend over the periods with available data. It was around 27.22% in 2017 and slightly increased to 28.4% in 2018. A notable drop occurred in 2019, with the CTR falling to 9.28%, reflecting a lower tax burden relative to operating profits. No data was reported for 2020 likely due to the operational loss. Post-2020, the effective cash tax rate rose to 17.82% in 2021 but decreased again to 13.44% in 2022, indicating a relatively moderate tax expense compared to net operating profit before taxes in these years.