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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- Statement of Comprehensive Income
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Geographic Areas
- Price to FCFE (P/FCFE)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Aggregate Accruals
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Return on Invested Capital (ROIC)
Bristol-Myers Squibb Co., ROIC calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| ROIC3 | ||||||
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 NOPAT. See details »
2 Invested capital. See details »
3 2025 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The Return on Invested Capital (ROIC) exhibited considerable fluctuation over the five-year period. Initial values demonstrated a generally positive return, followed by a significant decline and subsequent recovery.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT decreased from US$6,656 million in 2021 to US$4,571 million in 2022, representing a substantial reduction. A partial recovery was observed in 2023, with NOPAT reaching US$5,869 million. However, 2024 witnessed a dramatic shift to a loss of US$9,292 million before a strong rebound to US$7,695 million in 2025.
- Invested Capital
- Invested capital consistently decreased throughout the period, moving from US$80,284 million in 2021 to US$59,271 million in 2025. This represents a cumulative decrease of approximately 26% over the five years. The rate of decline appeared relatively consistent year-over-year.
- Return on Invested Capital (ROIC)
- ROIC began at 8.29% in 2021, declining to 6.37% in 2022, mirroring the decrease in NOPAT. A recovery to 8.69% occurred in 2023. The substantial loss reported in NOPAT for 2024 resulted in a significantly negative ROIC of -14.83%. Finally, ROIC experienced a strong positive swing in 2025, reaching 12.98%, driven by the recovery in NOPAT and continued decrease in invested capital.
The volatility in ROIC is primarily attributable to the fluctuations in NOPAT, particularly the large loss in 2024. While invested capital decreased consistently, its impact on ROIC was secondary to the NOPAT performance. The 2025 results suggest a potential stabilization and improved efficiency, as evidenced by the highest ROIC value within the observed period.
Decomposition of ROIC
Bristol-Myers Squibb Co., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2025 | = | × | × | ||||
| Dec 31, 2024 | = | × | × | ||||
| Dec 31, 2023 | = | × | × | ||||
| Dec 31, 2022 | = | × | × | ||||
| Dec 31, 2021 | = | × | × |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
The period under review demonstrates significant fluctuations in the components of return on invested capital. Overall, the ROIC exhibits volatility, moving from 8.29% in 2021 to a negative value in 2024 before recovering to 12.98% in 2025. This movement is driven by changes in operating profit margin, capital turnover, and the impact of the effective cash tax rate.
- Operating Profit Margin (OPM)
- The operating profit margin initially decreased from 20.31% in 2021 to 19.38% in 2022. A subsequent increase is observed, reaching 21.81% in 2023. However, a substantial decline occurred in 2024, resulting in a negative margin of -12.88%. The margin then rebounded strongly to 23.55% in 2025, exceeding the 2021 level. This volatility significantly influences the overall ROIC.
- Turnover of Capital (TO)
- The turnover of capital shows a consistent upward trend throughout the period. Starting at 0.58 in 2021, it increased to 0.64 in 2022 and 0.67 in 2023. The rate of increase accelerated in 2024 and 2025, reaching 0.77 and 0.81 respectively. This indicates increasing efficiency in utilizing capital to generate revenue.
- Effective Cash Tax Rate (CTR)
- The (1 – Effective cash tax rate) component experienced considerable variation. It began at 70.66% in 2021, decreased substantially to 51.09% in 2022, and then rose to 59.79% in 2023. A notable shift occurred in 2024, with the value reaching 100.00%, suggesting a full tax burden. This value then decreased to 67.79% in 2025. These fluctuations in the tax rate component contribute to the overall ROIC variability.
The negative ROIC in 2024 is primarily attributable to the significantly negative operating profit margin, despite the continued improvement in capital turnover. The recovery in ROIC in 2025 is driven by the substantial improvement in the operating profit margin, coupled with the continued increase in capital turnover and a more favorable tax rate component.
The interplay between these three components – operating profitability, asset utilization, and tax efficiency – dictates the overall return on invested capital. The observed trends suggest a period of operational challenges in 2024, followed by a strong recovery in 2025.
Operating Profit Margin (OPM)
Bristol-Myers Squibb Co., OPM calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Revenues | ||||||
| Profitability Ratio | ||||||
| OPM3 | ||||||
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2025 Calculation
OPM = 100 × NOPBT ÷ Revenues
= 100 × ÷ =
4 Click competitor name to see calculations.
The operating profit margin exhibited considerable fluctuation over the five-year period. Initial values demonstrated a generally healthy profitability, followed by a significant downturn and subsequent recovery.
- Operating Profit Margin (OPM) - Trend Analysis
- The operating profit margin began at 20.31% in 2021, decreasing to 19.38% in 2022. A recovery was then observed in 2023, with the margin increasing to 21.81%. However, 2024 witnessed a substantial decline, resulting in a negative margin of -12.88%. The final year, 2025, showed a strong rebound, with the operating profit margin reaching 23.55%.
The net operating profit before taxes mirrored the trend in the operating profit margin. A slight decrease occurred between 2021 and 2022, followed by an increase in 2023. The substantial negative value in 2024 directly contributed to the negative operating profit margin observed in that year. The significant increase in net operating profit before taxes in 2025 drove the substantial improvement in the operating profit margin.
- Revenue - Trend Analysis
- Revenues demonstrated relative stability between 2021 and 2023, fluctuating between US$45.006 and US$46.385 million. A notable increase was recorded in 2024, with revenues reaching US$48.300 million. Revenue remained relatively consistent in 2025 at US$48.194 million.
The divergence between revenue and operating profit margin is particularly noteworthy in 2024. Despite increased revenues, the operating profit margin became negative, suggesting a significant increase in operating costs or a substantial decrease in pricing power. The subsequent recovery in 2025, with both revenues remaining stable and the operating profit margin increasing substantially, indicates successful cost management or pricing strategies.
Turnover of Capital (TO)
Bristol-Myers Squibb Co., TO calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Invested capital. See details »
2 2025 Calculation
TO = Revenues ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
The period under review demonstrates a consistent upward trend in the turnover of capital. Revenues experienced initial fluctuation, followed by stabilization and modest growth, while invested capital consistently decreased. This combination drove the observed improvements in capital efficiency.
- Revenues
- Revenues decreased slightly from US$46,385 million in 2021 to US$46,159 million in 2022. A further decrease was noted in 2023, reaching US$45,006 million. However, revenues rebounded in 2024 to US$48,300 million and remained relatively stable in 2025 at US$48,194 million. This suggests a period of initial challenges followed by recovery and stabilization.
- Invested Capital
- Invested capital exhibited a consistent downward trend throughout the period. It decreased from US$80,284 million in 2021 to US$71,720 million in 2022, continuing to US$67,562 million in 2023, US$62,654 million in 2024, and finally reaching US$59,271 million in 2025. This sustained reduction in invested capital indicates a potential focus on capital discipline or asset optimization.
- Turnover of Capital (TO)
- The turnover of capital ratio increased steadily over the five-year period. Starting at 0.58 in 2021, it rose to 0.64 in 2022, 0.67 in 2023, 0.77 in 2024, and reached 0.81 in 2025. This indicates increasing efficiency in generating revenue from each dollar of invested capital. The accelerating rate of increase in the latter years suggests a strengthening ability to utilize capital effectively.
The combined effect of decreasing invested capital and relatively stable, ultimately growing revenues resulted in a significant improvement in the turnover of capital. This suggests the entity is becoming more effective at utilizing its capital base to generate sales.
Effective Cash Tax Rate (CTR)
Bristol-Myers Squibb Co., CTR calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2025 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × ÷ =
4 Click competitor name to see calculations.
The effective cash tax rate exhibited considerable fluctuation over the observed period. Cash operating taxes generally increased from 2021 to 2022, then decreased in 2023, further decreased significantly in 2024, and increased again in 2025. Net operating profit before taxes also demonstrated volatility, increasing from 2021 to 2023, experiencing a substantial decline in 2024, and recovering strongly in 2025.
- Effective Cash Tax Rate (CTR) - Trend Analysis
- The effective cash tax rate increased substantially from 29.34% in 2021 to 48.91% in 2022. This increase suggests a higher proportion of cash taxes were paid relative to pre-tax operating profits during that year. A subsequent decrease to 40.21% in 2023 indicates some moderation in the cash tax burden. The rate is not available for 2024, but recovers to 32.21% in 2025. The fluctuations suggest changes in the composition of taxable income, the utilization of tax credits, or changes in applicable tax laws.
- Relationship between NOPBT and CTR
- The significant decline in net operating profit before taxes in 2024, coupled with the absence of a corresponding CTR value, warrants further investigation. The substantial recovery in NOPBT in 2025, alongside a CTR of 32.21%, suggests a return to more typical tax payment patterns. The interplay between pre-tax profits and cash taxes is a key driver of the observed CTR variations.
The observed changes in the effective cash tax rate are likely influenced by the company’s operating performance and tax planning strategies. The large swing in NOPBT in 2024, and the lack of CTR for that year, are particularly noteworthy and require additional scrutiny to understand the underlying causes.