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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- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Reportable Segments
- Enterprise Value to FCFF (EV/FCFF)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Analysis of Debt
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Return on Invested Capital (ROIC)
CVS Health Corp., 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 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| ROIC3 | ||||||
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| Abbott Laboratories | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
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 × ÷ =
4 Click competitor name to see calculations.
The financial data indicates fluctuating performance across the reported periods. Net operating profit after taxes (NOPAT), expressed in millions of US dollars, exhibited a general pattern of volatility. Initially, NOPAT increased slightly from 9,067 in 2020 to 9,170 in 2021. This was followed by a significant decline to 3,871 in 2022. However, there was a recovery to 9,523 in 2023 before falling again to 5,319 in 2024. This pattern suggests periods of operational challenges interspersed with recoveries.
Invested capital, measured in millions of US dollars, showed a declining trend overall from 2020 to 2024, starting at 136,669 in 2020 and decreasing to 131,642 in 2024. The lowest point was 123,703 in 2022, followed by an increase in 2023 and a slight decrease again in 2024. This indicates some adjustments to the capital base, potentially reflecting changes in investment strategies or asset management.
Return on invested capital (ROIC), expressed as a percentage, mirrored the volatility observed in NOPAT. It increased from 6.63% in 2020 to 7.01% in 2021, then sharply dropped to 3.13% in 2022. A strong recovery took place in 2023, with ROIC reaching 7.07%, but this was followed by a decrease to 4.04% in 2024. The ROIC fluctuations suggest variations in operational efficiency and profitability relative to the invested capital over time.
- Net Operating Profit After Taxes (NOPAT)
- Showed significant volatility with an initial increase, a substantial dip in 2022, recovery in 2023, and decline again in 2024.
- Invested Capital
- Generally declined over the five-year period with the lowest point in 2022, implying changes in capital deployment or asset base management.
- Return on Invested Capital (ROIC)
- Followed a similar volatile pattern as NOPAT, reflecting fluctuations in profitability and capital efficiency.
Overall, the data reveals periods of instability in profitability and capital returns, with 2022 marking a notable low point in both profit and efficiency, followed by partial recoveries. The continued variability suggests potential challenges in maintaining consistent performance and optimizing capital deployment over the analyzed years.
Decomposition of ROIC
CVS Health Corp., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2024 | = | × | × | ||||
| Dec 31, 2023 | = | × | × | ||||
| Dec 31, 2022 | = | × | × | ||||
| Dec 31, 2021 | = | × | × | ||||
| Dec 31, 2020 | = | × | × |
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 exhibits a fluctuating downward trend over the periods analyzed. Starting at 4.79% in 2020, it decreases to 4.32% in 2021, followed by a significant drop to 2.45% in 2022. A partial recovery is observed in 2023, with the margin rising to 3.78%, but it declines again in 2024 to 2.1%. This pattern suggests increasing pressure on operating profitability with volatility in performance.
- Turnover of Capital (TO)
- Turnover of capital shows a consistent and steady increase throughout the periods. It progresses from 1.96 in 2020 to 2.22 in 2021, then to 2.6 in 2022, 2.65 in 2023, reaching 2.82 in 2024. This indicates improving efficiency in utilizing capital to generate revenue or sales over time.
- Effective Cash Tax Rate (1 – CTR)
- The effective cash tax rate reveals volatility and inconsistency over the years analyzed. It starts at 70.64% in 2020, rising slightly to 72.91% in 2021, then dropping considerably to 49.1% in 2022. It rebounds sharply to 70.6% in 2023 and slightly decreases to 68.34% in 2024. This variability may reflect changes in tax planning, regulatory impacts, or shifts in taxable income composition.
- Return on Invested Capital (ROIC)
- Return on invested capital follows a pattern similar to operating profit margin, with overall fluctuation and some recovery periods. Beginning at 6.63% in 2020, it rises marginally to 7.01% in 2021, then drops to 3.13% in 2022. In 2023, ROIC increases appreciably to 7.07%, but falls to 4.04% in 2024. The trend suggests periods of reduced profitability on capital employed interspersed with recovery, though the 2024 figure remains lower than earlier peak values.
Operating Profit Margin (OPM)
CVS Health Corp., 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 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Revenues from customers | ||||||
| Profitability Ratio | ||||||
| OPM3 | ||||||
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| Abbott Laboratories | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
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 from customers
= 100 × ÷ =
4 Click competitor name to see calculations.
The financial data indicates varying trends in profitability and revenue over the observed five-year period.
- Net Operating Profit Before Taxes (NOPBT)
- There was an initial slight decline in NOPBT from 12,836 million USD in 2020 to 12,577 million USD in 2021, followed by a significant decrease to 7,884 million USD in 2022. This was succeeded by a strong recovery to 13,488 million USD in 2023, before dropping again to 7,783 million USD in 2024. The pattern suggests volatility in profitability unrelated directly to revenue growth.
- Revenues from Customers
- The revenue consistently increased year-over-year, growing from 267,908 million USD in 2020 to 370,656 million USD in 2024. This steady upward trend demonstrates a continuous expansion in customer receipts despite fluctuations in operating profit.
- Operating Profit Margin (OPM)
- The operating profit margin shows a declining trend overall. Starting at 4.79% in 2020, it decreased to 4.32% in 2021 and further dropped sharply to 2.45% in 2022. Although there was some improvement in 2023 to 3.78%, it declined again to 2.1% in 2024. This decline in margin reflects increasing cost pressures or decreasing efficiency in converting revenue into operating profit over time.
Overall, while revenues have steadily increased, profitability metrics have displayed significant fluctuations and a downward pressure on margins, highlighting potential challenges in managing costs or maintaining operational efficiency relative to revenue growth.
Turnover of Capital (TO)
CVS Health Corp., 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 from customers | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| Abbott Laboratories | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
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 from customers ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
- Revenues from customers
- The revenues exhibit a consistent upward trend from 2020 to 2024. Starting at $267,908 million in 2020, revenues increase steadily each year, reaching $370,656 million by 2024. This reflects a robust growth trajectory, with an overall increase of approximately 38.3% over the five-year period.
- Invested capital
- Invested capital shows a fluctuating pattern throughout the years. Beginning at $136,669 million in 2020, it declines to $123,703 million in 2022, indicating a contraction in capital deployment or asset base during this interval. A subsequent recovery occurs in 2023, with invested capital rising to $134,694 million, followed by a slight decrease to $131,642 million in 2024. Overall, invested capital contracts marginally by about 3.7% from 2020 to 2024.
- Turnover of capital (TO)
- The turnover of capital ratio demonstrates a clear strengthening over the period. It improves from 1.96 in 2020 to 2.82 by 2024, reflecting increased efficiency in utilizing invested capital to generate revenues. This upward trend suggests that the company is effectively leveraging its assets to drive higher sales volume relative to its capital base.
- Summary
- The data indicates continuous revenue growth accompanied by a stable to slightly decreasing invested capital base. This combination results in increasing capital turnover, implying enhanced asset utilization and operational efficiency over time. The overall financial pattern suggests effective management of capital resources while expanding market reach or sales performance.
Effective Cash Tax Rate (CTR)
CVS Health Corp., CTR calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Tax Rate | ||||||
| CTR3 | ||||||
| Benchmarks | ||||||
| CTR, Competitors4 | ||||||
| Abbott Laboratories | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
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 × ÷ =
4 Click competitor name to see calculations.
- Cash Operating Taxes
- The cash operating taxes demonstrate a fluctuating pattern over the reported periods. Starting at $3,769 million in 2020, there was a decline in 2021 to $3,407 million, followed by an increase to $4,013 million in 2022. The amount slightly decreased to $3,965 million in 2023, then a significant reduction to $2,464 million in 2024. This irregular trend indicates variability in taxable income or changes in tax regulations impacting cash taxes paid.
- Net Operating Profit Before Taxes (NOPBT)
- The NOPBT figures show considerable volatility throughout the observed years. From a high of $12,836 million in 2020, there is a slight decrease to $12,577 million in 2021, followed by a sharp decline to $7,884 million in 2022. In 2023, the NOPBT rebounds substantially to $13,488 million, exceeding previous levels, then declines again to $7,783 million in 2024. These fluctuations suggest varying operational performance or external factors affecting profitability before taxation.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate percentage exhibits notable variability. Initially, it decreased from 29.36% in 2020 to 27.09% in 2021, then sharply increased to 50.9% in 2022, which is a significant outlier compared to other years. The rate normalizes to 29.4% in 2023, aligning closely with the earlier years, with a slight increase to 31.66% in 2024. This spike in 2022 could indicate a one-time tax impact or reduced deductions that year, with subsequent years showing stabilization.
- Summary Insight
- The data presents a pattern of volatility in operating profitability and tax-related metrics, with 2022 standing out as a year of reduced profitability accompanied by a disproportionately high effective cash tax rate. The considerable swings in NOPBT and corresponding tax payments imply sensitivity to external or internal business conditions. Although cash operating taxes and effective tax rates tend to normalize post-2022, the declining cash tax payments in 2024 relative to prior years may suggest tax planning strategies or changes in the company's taxable income base.