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Chevron Corp. (CVX)

Return on Capital (ROC)

Difficulty: Advanced

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)

Chevron Corp., ROIC calculation

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Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 18,189  7,468  (4,972) (845) 20,068 
Invested capital2 212,825  208,093  214,697  219,665  217,074 
Ratio
ROIC3 8.55% 3.59% -2.32% -0.38% 9.24%

Based on: 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-20).

2018 Calculations

1 NOPAT. See Details »

2 Invested capital. See Details »

3 ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 18,189 ÷ 212,825 = 8.55%

Ratio Description The company
ROIC A measure of the periodic, after tax, cash-on-cash yield earned in the business. Chevron Corp.’s ROIC improved from 2016 to 2017 and from 2017 to 2018.