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)
Bristol-Myers Squibb Co., 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 | (9,292) | 5,869) | 4,571) | 6,656) | (6,822) | |
| Invested capital2 | 62,654) | 67,562) | 71,720) | 80,284) | 90,149) | |
| Performance Ratio | ||||||
| ROIC3 | -14.83% | 8.69% | 6.37% | 8.29% | -7.57% | |
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| AbbVie Inc. | 6.59% | 4.83% | 14.05% | 12.89% | 4.30% | |
| Amgen Inc. | 8.51% | 11.15% | 16.11% | 15.93% | 20.35% | |
| Danaher Corp. | 4.64% | 3.94% | 8.76% | 9.01% | 7.43% | |
| Eli Lilly & Co. | 23.65% | 10.52% | 17.78% | 19.28% | 25.89% | |
| Gilead Sciences Inc. | -1.80% | 11.10% | 8.09% | 14.43% | 1.26% | |
| Johnson & Johnson | 10.76% | 8.98% | 14.16% | 19.23% | 13.97% | |
| Merck & Co. Inc. | 21.08% | -1.02% | 19.14% | 18.87% | 11.66% | |
| Pfizer Inc. | 5.43% | -0.82% | 28.01% | 20.98% | 5.87% | |
| Regeneron Pharmaceuticals Inc. | 26.67% | 23.53% | 28.87% | 72.50% | 43.95% | |
| Thermo Fisher Scientific Inc. | 6.58% | 5.98% | 7.76% | 9.36% | 10.70% | |
| Vertex Pharmaceuticals Inc. | -14.06% | 19.93% | 22.66% | 23.86% | 37.13% | |
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 × -9,292 ÷ 62,654 = -14.83%
4 Click competitor name to see calculations.
The financial data presents several noteworthy trends and fluctuations over the five-year period examined.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT experienced significant volatility. It started with a substantial loss in 2020 of -$6,822 million, followed by a strong recovery in 2021 to a profit of $6,656 million. This was succeeded by a decline to $4,571 million in 2022, a partial rebound to $5,869 million in 2023, and a sharp reversal back to a loss of -$9,292 million in 2024. This pattern indicates considerable instability in the company’s profitability with pronounced swings between losses and gains.
- Invested Capital
- The invested capital demonstrated a steady declining trend across the period. Beginning at $90,149 million in 2020, it decreased every year to reach $62,654 million by 2024. This consistent reduction in invested capital may suggest divestitures, asset sales, or a strategic move to lower capital intensity within the business.
- Return on Invested Capital (ROIC)
- The ROIC mirrored the volatility seen in NOPAT. Initially, the company reported a negative return of -7.57% in 2020, improved markedly to 8.29% in 2021, and then declined to 6.37% in 2022. An improvement to 8.69% was noted in 2023, followed by a steep drop to -14.83% in 2024. The fluctuating ROIC reflects inconsistent efficiency in generating returns on the capital employed, peaking positively in the middle years before deteriorating sharply at the end of the period.
Overall, the data reflects a period of operational instability and declining capital base. The swings in profitability and return on capital highlight challenges in sustaining positive returns. The continuous reduction in invested capital may have implications for future earning capacity and warrants further examination regarding its underlying causes.
Decomposition of ROIC
Bristol-Myers Squibb Co., decomposition of ROIC
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 demonstrates significant volatility across the analyzed periods. It moves from a negative margin of -12.65% in 2020 to positive margins around 20% in the subsequent years from 2021 to 2023, peaking at 21.81% in 2023. However, it sharply declines again to -12.88% by 2024, indicating fluctuating operational efficiency and profitability challenges in the latest period.
- Turnover of Capital (TO)
- The turnover of capital exhibits a consistent upward trend over the five years. Starting at 0.47 in 2020, it steadily increases each year, reaching 0.77 by 2024. This reflects improving asset utilization efficiency, suggesting that the company is generating more revenue per unit of capital employed over time.
- 1 – Effective Cash Tax Rate (CTR)
- This metric shows considerable variation, beginning at 100% in 2020, then declining to 70.66% in 2021 and further to 51.09% in 2022. It recovers somewhat to 59.79% in 2023 before returning to 100% in 2024. These fluctuations indicate varying levels of effective cash tax burden, with periods of potentially lower cash taxes followed by a return to higher cash tax outflows.
- Return on Invested Capital (ROIC)
- The return on invested capital reflects notable instability. It starts negative at -7.57% in 2020, improves to positive figures between 6.37% and 8.69% during 2021 to 2023, then declines sharply to -14.83% in 2024. This pattern suggests phases of successful capital deployment interspersed with periods of underperformance or losses reducing overall return.
Operating Profit Margin (OPM)
Bristol-Myers Squibb Co., 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 | (9,292) | 5,869) | 4,571) | 6,656) | (6,822) | |
| Add: Cash operating taxes2 | 3,068) | 3,947) | 4,376) | 2,764) | 1,445) | |
| Net operating profit before taxes (NOPBT) | (6,223) | 9,816) | 8,948) | 9,419) | (5,377) | |
| Revenues | 48,300) | 45,006) | 46,159) | 46,385) | 42,518) | |
| Profitability Ratio | ||||||
| OPM3 | -12.88% | 21.81% | 19.38% | 20.31% | -12.65% | |
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| AbbVie Inc. | 10.48% | 14.58% | 26.77% | 27.06% | 13.19% | |
| Amgen Inc. | 24.36% | 40.00% | 35.35% | 32.55% | 38.71% | |
| Danaher Corp. | 19.69% | 21.44% | 27.12% | 27.65% | 23.43% | |
| Eli Lilly & Co. | 29.70% | 19.99% | 24.99% | 22.91% | 30.98% | |
| Gilead Sciences Inc. | 4.92% | 27.67% | 24.71% | 34.43% | 10.83% | |
| Johnson & Johnson | 18.19% | 17.15% | 22.67% | 24.39% | 20.20% | |
| Merck & Co. Inc. | 32.71% | 4.63% | 30.22% | 30.60% | 19.13% | |
| Pfizer Inc. | 15.40% | 1.40% | 38.53% | 29.86% | 19.18% | |
| Regeneron Pharmaceuticals Inc. | 30.25% | 29.03% | 39.28% | 57.80% | 45.28% | |
| Thermo Fisher Scientific Inc. | 17.13% | 15.91% | 18.33% | 23.79% | 24.12% | |
| Vertex Pharmaceuticals Inc. | -2.19% | 38.69% | 46.55% | 36.91% | 50.94% | |
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 ÷ Revenues
= 100 × -6,223 ÷ 48,300 = -12.88%
4 Click competitor name to see calculations.
The financial data reveals several notable trends over the five-year period from 2020 to 2024. The company's net operating profit before taxes (NOPBT) shows marked volatility throughout these years. In 2020, a significant loss was recorded, with NOPBT at -$5,377 million, followed by a strong recovery in 2021 to a positive $9,419 million. This positive performance was maintained in 2022 and 2023 with NOPBT figures of $8,948 million and $9,816 million respectively. However, in 2024, the company experienced a sharp reversal, with NOPBT declining back to a loss position of -$6,223 million.
Revenues over the same period generally increased, though with some fluctuations. Starting at $42,518 million in 2020, revenues rose to $46,385 million in 2021, then slightly decreased to $46,159 million in 2022, followed by a more noticeable decline to $45,006 million in 2023. In 2024, revenue rebounded to its highest level in the period at $48,300 million.
The operating profit margin (OPM) shows a pattern that closely mirrors the NOPBT fluctuations. The margin was negative at -12.65% in 2020, aligning with the net operating loss. It shifted to a strong positive margin of 20.31% in 2021, then slightly declined but remained robust at 19.38% in 2022 and improved again to 21.81% in 2023. In 2024, the margin sharply decreased to -12.88%, turning negative once more, which corresponds with the return to operating loss seen in NOPBT.
- NOPBT Trends
- Initial large loss in 2020, strong recovery through 2021-2023, and a significant loss again in 2024.
- Revenue Trends
- General upward trend with a dip in 2022 and 2023, peaking at the highest level in 2024.
- Operating Profit Margin Trends
- Negative margin in 2020, strong positive margins from 2021 to 2023, and a reversion to negative margin in 2024.
Overall, the data indicates a period of financial instability marked by a dramatic turnaround in profitability after 2020, sustained profitability for several years, and then a decline back into losses in 2024 despite revenue growth. The negative operating profit margin in 2024 despite the highest revenue suggests increased costs or other expenses affecting profitability. The volatility in profitability amidst fluctuating revenues points to operational challenges impacting the company's efficiency and cost management during the period.
Turnover of Capital (TO)
Bristol-Myers Squibb Co., TO calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | 48,300) | 45,006) | 46,159) | 46,385) | 42,518) | |
| Invested capital1 | 62,654) | 67,562) | 71,720) | 80,284) | 90,149) | |
| Efficiency Ratio | ||||||
| TO2 | 0.77 | 0.67 | 0.64 | 0.58 | 0.47 | |
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| AbbVie Inc. | 0.81 | 0.80 | 0.71 | 0.59 | 0.44 | |
| Amgen Inc. | 0.51 | 0.38 | 0.62 | 0.60 | 0.63 | |
| Danaher Corp. | 0.32 | 0.30 | 0.40 | 0.40 | 0.34 | |
| Eli Lilly & Co. | 1.26 | 1.16 | 1.17 | 1.08 | 1.00 | |
| Gilead Sciences Inc. | 0.65 | 0.59 | 0.59 | 0.57 | 0.48 | |
| Johnson & Johnson | 0.83 | 0.86 | 0.83 | 0.96 | 0.84 | |
| Merck & Co. Inc. | 0.81 | 0.86 | 0.80 | 0.69 | 0.84 | |
| Pfizer Inc. | 0.47 | 0.38 | 0.91 | 0.94 | 0.41 | |
| Regeneron Pharmaceuticals Inc. | 1.14 | 1.10 | 0.99 | 1.48 | 1.03 | |
| Thermo Fisher Scientific Inc. | 0.52 | 0.50 | 0.54 | 0.49 | 0.53 | |
| Vertex Pharmaceuticals Inc. | 1.22 | 0.75 | 0.68 | 0.81 | 0.76 | |
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 = Revenues ÷ Invested capital
= 48,300 ÷ 62,654 = 0.77
3 Click competitor name to see calculations.
- Revenues
- Revenues exhibited a moderate upward trend over the analyzed periods, beginning at 42,518 million USD in 2020 and reaching 48,300 million USD by 2024. There was a slight dip in 2023 to 45,006 million USD following a decline from 46,385 million USD in 2021 to 46,159 million USD in 2022, but the overall trajectory remains positive with growth resuming in the last recorded year.
- Invested Capital
- Invested capital demonstrated a consistent decreasing trend across the time frame. Starting from 90,149 million USD in 2020, it declined steadily each year to reach 62,654 million USD by 2024. This reduction may indicate efforts to optimize capital deployment or divestments over the period.
- Turnover of Capital (TO)
- The turnover of capital ratio showed a steady increase year-over-year, rising from 0.47 in 2020 to 0.77 in 2024. The increase in this ratio suggests improving efficiency in utilizing invested capital to generate revenues, reflecting a positive operational trend despite the decreasing level of invested capital.
- Overall Analysis
- The combination of decreasing invested capital with rising turnover of capital indicates enhanced capital efficiency over the examined period. Revenues exhibited resilience, with growth overcoming a slight setback in 2023. Collectively, this suggests an improved ability to generate sales from a smaller asset base, which may positively impact returns on invested capital and overall financial performance.
Effective Cash Tax Rate (CTR)
Bristol-Myers Squibb Co., 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 | (9,292) | 5,869) | 4,571) | 6,656) | (6,822) | |
| Add: Cash operating taxes2 | 3,068) | 3,947) | 4,376) | 2,764) | 1,445) | |
| Net operating profit before taxes (NOPBT) | (6,223) | 9,816) | 8,948) | 9,419) | (5,377) | |
| Tax Rate | ||||||
| CTR3 | — | 40.21% | 48.91% | 29.34% | — | |
| Benchmarks | ||||||
| CTR, Competitors4 | ||||||
| AbbVie Inc. | 22.68% | 58.42% | 25.72% | 18.70% | 26.24% | |
| Amgen Inc. | 31.09% | 27.52% | 27.01% | 18.93% | 15.91% | |
| Danaher Corp. | 27.31% | 39.60% | 19.69% | 18.58% | 7.07% | |
| Eli Lilly & Co. | 36.72% | 54.70% | 39.42% | 22.30% | 16.37% | |
| Gilead Sciences Inc. | 156.51% | 31.75% | 44.70% | 25.84% | 76.01% | |
| Johnson & Johnson | 29.05% | 39.03% | 25.14% | 17.53% | 17.68% | |
| Merck & Co. Inc. | 20.23% | 125.66% | 20.99% | 10.42% | 27.35% | |
| Pfizer Inc. | 24.76% | 252.75% | 20.44% | 25.02% | 25.53% | |
| Regeneron Pharmaceuticals Inc. | 22.67% | 26.07% | 26.00% | 15.19% | 5.43% | |
| Thermo Fisher Scientific Inc. | 26.49% | 24.94% | 21.94% | 19.99% | 15.79% | |
| Vertex Pharmaceuticals Inc. | — | 30.87% | 28.16% | 19.91% | 4.34% | |
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 × 3,068 ÷ -6,223 = —
4 Click competitor name to see calculations.
The financial data exhibits notable fluctuations in key operating profit and tax-related figures over the five-year period.
- Net Operating Profit Before Taxes (NOPBT)
- The NOPBT demonstrates significant variability. Starting with a negative value of -$5,377 million in 2020, it drastically improves to positive $9,419 million in 2021, maintaining a similar positive level in 2022 ($8,948 million) and slightly increasing in 2023 ($9,816 million). However, in 2024, it reverses sharply to a negative figure of -$6,223 million. This pattern reflects a volatile profitability environment with a strong rebound in the middle years followed by a renewed downturn.
- Cash Operating Taxes
- Cash operating tax payments show an overall upward trend from 2020 through 2022, increasing from $1,445 million to $4,376 million, more than tripling within this timeframe. The figure then decreases to $3,947 million in 2023 and further declines to $3,068 million in 2024. The initial increase corresponds with the rise in operating profits, while the subsequent decline coincides with the drop in profitability observed in the final year.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate is available only for select years, showing 29.34% in 2021, escalating sharply to 48.91% in 2022, and then declining to 40.21% in 2023. This indicates a substantial rise in the proportion of profits paid as cash taxes in 2022, followed by a moderation in 2023. Data for 2020 and 2024 are missing, limiting the full assessment of tax rate trends across the entire period.
In summary, the data reveal a period of pronounced volatility in operating profitability and tax payments. After recovering from a loss in 2020 and reaching a peak in 2023, the company experiences a notable downturn in operating profit in 2024. Tax payments and effective tax rates generally track the profitability changes, exhibiting higher tax liabilities during years of stronger profits and lower payments as profitability declines. The fluctuations suggest external or internal factors impacting earnings and taxation patterns, warranting further investigation into the causes behind the sharp reversals observed at the beginning and end of the period.