Return on capital (ROC) is after tax rate of return on net business assets. ROIC is unaffected by changes in interest rates or company’s debt and equity structure. It measures business productivity performance.

Return on Invested Capital (ROIC)
Decomposition of ROIC
Operating Profit Margin (OPM)
Turnover of Capital (TO)
Effective Cash Tax Rate (CTR)

Bristol-Myers Squibb Co., ROIC calculation, comparison to benchmarks

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)¹	2,482	5,363	2,096	4,399	1,351
Invested capital²	100,285	18,973	16,538	17,735	14,454
Performance Ratio
ROIC³	2.47%	28.27%	12.68%	24.80%	9.35%
Benchmarks
ROIC, Competitors⁴
Abbott Laboratories	6.53%	6.19%	0.03%	3.53%	9.18%
AbbVie Inc.	14.72%	15.25%	3.87%	11.87%	13.20%
Amgen Inc.	22.74%	37.39%	6.60%	27.25%	20.99%
Biogen Inc.	42.59%	35.40%	23.16%	28.10%	32.03%
Eli Lilly & Co.	22.93%	14.16%	-4.90%	13.83%	6.75%
Gilead Sciences Inc.	13.17%	18.93%	20.25%	68.44%	68.63%
Illumina Inc.	19.15%	19.42%	20.55%	15.77%	16.47%
Johnson & Johnson	12.94%	14.38%	3.55%	19.24%	21.25%
Merck & Co. Inc.	18.75%	12.05%	0.69%	5.02%	5.48%
Pfizer Inc.	14.16%	11.82%	-4.78%	6.18%	7.46%
Regeneron Pharmaceuticals Inc.	34.24%	37.16%	29.41%	22.47%	37.54%
Vertex Pharmaceuticals Inc.	27.62%	16.16%	0.62%	0.28%	-19.23%
Zoetis Inc.	15.96%	15.59%	13.93%	10.88%	7.81%

Based on: 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-25), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-12).

¹ NOPAT. See details »

² Invested capital. See details »

³ 2019 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 2,482 ÷ 100,285 = 2.47%

⁴ Click competitor name to see calculations.

Performance ratio	Description	The company
ROIC	A measure of the periodic, after tax, cash-on-cash yield earned in the business.	Bristol-Myers Squibb Co.’s ROIC improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Bristol-Myers Squibb Co., decomposition of ROIC


	ROIC	=	OPM¹	×	TO²	×	1 – CTR³
Dec 31, 2019	2.47%	=	18.78%	×	0.26	×	50.55%
Dec 31, 2018	28.27%	=	28.42%	×	1.19	×	83.65%
Dec 31, 2017	12.68%	=	25.35%	×	1.26	×	39.81%
Dec 31, 2016	24.80%	=	31.17%	×	1.10	×	72.64%
Dec 31, 2015	9.35%	=	13.17%	×	1.15	×	61.94%

Based on: 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-25), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-12).

¹ Operating profit margin (OPM). See calculations »

² Turnover of capital (TO). See calculations »

³ Effective cash tax rate (CTR). See calculations »

The primary reason for the decrease in return on invested capital (ROIC) over 2019 year is the decrease in efficiency measured by turnover of capital (TO) ratio.

Bristol-Myers Squibb Co., OPM calculation, comparison to benchmarks

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)¹	2,482	5,363	2,096	4,399	1,351
Add: Cash operating taxes²	2,427	1,048	3,170	1,657	830
Net operating profit before taxes (NOPBT)	4,909	6,411	5,266	6,056	2,181

Revenues	26,145	22,561	20,776	19,427	16,560
Profitability Ratio
OPM³	18.78%	28.42%	25.35%	31.17%	13.17%
Benchmarks
OPM, Competitors⁴
Abbott Laboratories	14.97%	11.67%	11.07%	12.18%	14.96%
AbbVie Inc.	30.01%	19.46%	30.71%	34.32%	32.29%
Amgen Inc.	46.69%	50.23%	50.31%	48.00%	43.83%
Biogen Inc.	49.60%	44.64%	43.44%	44.68%	45.53%
Eli Lilly & Co.	24.91%	15.94%	9.01%	15.95%	12.94%
Gilead Sciences Inc.	28.73%	41.64%	55.87%	59.42%	71.65%
Illumina Inc.	30.23%	27.22%	39.36%	24.75%	28.89%
Johnson & Johnson	21.00%	22.50%	23.33%	27.69%	28.57%
Merck & Co. Inc.	26.55%	21.38%	17.70%	12.62%	13.33%
Pfizer Inc.	35.34%	23.53%	23.75%	18.27%	21.52%
Regeneron Pharmaceuticals Inc.	33.76%	38.20%	34.45%	31.23%	39.36%
Vertex Pharmaceuticals Inc.	33.47%	21.74%	2.78%	2.86%	-41.40%
Zoetis Inc.	31.81%	32.17%	30.87%	25.67%	18.43%

Based on: 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-25), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-12).

¹ NOPAT. See details »

² Cash operating taxes. See details »

³ 2019 Calculation
OPM = 100 × NOPBT ÷ Revenues
= 100 × 4,909 ÷ 26,145 = 18.78%

⁴ Click competitor name to see calculations.

Profitability ratio	Description	The company
OPM	The operating profit margin (OPM) is the ratio of pretax economic earnings, or NOPBT, to sales.	Bristol-Myers Squibb Co.’s OPM improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Bristol-Myers Squibb Co., TO calculation, comparison to benchmarks

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Selected Financial Data (US$ in millions)
Revenues	26,145	22,561	20,776	19,427	16,560
Invested capital¹	100,285	18,973	16,538	17,735	14,454
Efficiency Ratio
TO²	0.26	1.19	1.26	1.10	1.15
Benchmarks
TO, Competitors³
Abbott Laboratories	0.55	0.52	0.42	0.46	0.67
AbbVie Inc.	0.53	0.98	0.62	0.53	0.52
Amgen Inc.	0.59	0.89	0.90	0.68	0.60
Biogen Inc.	1.02	1.02	0.98	0.89	0.97
Eli Lilly & Co.	1.04	0.95	1.02	0.93	0.90
Gilead Sciences Inc.	0.69	0.61	1.04	1.49	1.17
Illumina Inc.	0.71	0.84	0.77	0.83	0.81
Johnson & Johnson	0.85	0.81	0.72	0.85	0.94
Merck & Co. Inc.	0.87	0.86	0.81	0.75	0.63
Pfizer Inc.	0.43	0.53	0.51	0.43	0.46
Regeneron Pharmaceuticals Inc.	1.21	1.08	1.20	1.45	1.57
Vertex Pharmaceuticals Inc.	0.86	0.79	0.79	0.57	0.39
Zoetis Inc.	0.64	0.62	0.71	0.72	0.68

Based on: 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-25), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-12).

¹ Invested capital. See details »

² 2019 Calculation
TO = Revenues ÷ Invested capital
= 26,145 ÷ 100,285 = 0.26

³ Click competitor name to see calculations.

Efficiency ratio	Description	The company
TO	The turnover of capital (TO) is the ratio of sales to invested capital. Capital turnover is a function of the efficiency of working capital management and of net fixed assets.	Bristol-Myers Squibb Co.’s TO deteriorated from 2017 to 2018 and from 2018 to 2019.

Bristol-Myers Squibb Co., CTR calculation, comparison to benchmarks

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)¹	2,482	5,363	2,096	4,399	1,351
Add: Cash operating taxes²	2,427	1,048	3,170	1,657	830
Net operating profit before taxes (NOPBT)	4,909	6,411	5,266	6,056	2,181
Tax Rate
CTR³	49.45%	16.35%	60.19%	27.36%	38.06%
Benchmarks
CTR, Competitors⁴
Abbott Laboratories	21.15%	-1.36%	99.37%	37.12%	8.57%
AbbVie Inc.	7.43%	19.97%	79.78%	34.90%	21.63%
Amgen Inc.	17.97%	16.67%	85.49%	16.15%	20.26%
Biogen Inc.	15.53%	22.35%	45.79%	29.12%	27.39%
Eli Lilly & Co.	11.34%	6.98%	153.07%	6.91%	41.90%
Gilead Sciences Inc.	33.35%	25.30%	65.27%	22.94%	18.16%
Illumina Inc.	10.66%	14.61%	31.76%	23.65%	29.58%
Johnson & Johnson	27.17%	20.74%	78.78%	18.53%	20.84%
Merck & Co. Inc.	19.06%	34.64%	95.19%	47.06%	34.62%
Pfizer Inc.	6.31%	4.80%	139.36%	21.23%	24.39%
Regeneron Pharmaceuticals Inc.	16.35%	10.01%	28.60%	50.27%	39.16%
Vertex Pharmaceuticals Inc.	3.62%	5.81%	72.05%	83.04%	—
Zoetis Inc.	21.17%	22.25%	36.23%	41.44%	38.13%

Based on: 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-25), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-12).

¹ NOPAT. See details »

² Cash operating taxes. See details »

³ 2019 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 2,427 ÷ 4,909 = 49.45%

⁴ Click competitor name to see calculations.

Tax rate	Description	The company
CTR	Effective cash tax rate on operating income.	Bristol-Myers Squibb Co.’s CTR decreased from 2017 to 2018 but then increased from 2018 to 2019 not reaching 2017 level.

Bristol-Myers Squibb Co. (NYSE:BMY)

Return on Capital (ROC)

Return on Invested Capital (ROIC)

Decomposition of ROIC

Operating Profit Margin (OPM)

Turnover of Capital (TO)

Effective Cash Tax Rate (CTR)