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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Coca-Cola Co. pages available for free this week:
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Dividend Discount Model (DDM)
- Operating Profit Margin since 2005
- Debt to Equity since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Debt
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Return on Invested Capital (ROIC)
Coca-Cola 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 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| ROIC3 | ||||||
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International 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.
- Net Operating Profit After Taxes (NOPAT)
- The net operating profit after taxes exhibited an overall increasing trend from 8,649 million US dollars in 2020 to 10,945 million US dollars in 2024. There was a significant rise from 2020 to 2021, reaching 11,202 million, followed by a slight decline in 2022 to 10,120 million. Subsequently, NOPAT experienced gradual growth again in 2023 and 2024, stabilizing just below the 2021 peak.
- Invested Capital
- Invested capital showed a consistent upward trend over the period under review, increasing from 75,674 million US dollars in 2020 to 86,857 million US dollars in 2024. This steady rise indicates ongoing investment or asset increase across the years, with no year showing a decrease or stagnation in capital employed.
- Return on Invested Capital (ROIC)
- The return on invested capital percentage followed a fluctuating but generally positive trajectory. It increased from 11.43% in 2020 to a high of 13.95% in 2021, indicating improved efficiency in generating returns from capital invested. However, the ROIC declined to 12.66% in 2022 and then showed a slight recovery to 13.03% in 2023 before easing to 12.6% in 2024. Despite these fluctuations, the ROIC remained above the 2020 level throughout the period.
- Overall Analysis
- The company demonstrated growth in net operating profit and invested capital over the five-year period, reflecting expansion and sustained profitability. The ROIC, while experiencing some volatility, remained at healthy levels, suggesting efficient capital usage in most years. The slight decline in NOPAT and ROIC in 2022 might indicate transient operational challenges or external factors affecting profitability, but subsequent years show resilience and recovery. The continuous growth in invested capital suggests strategic reinvestment or asset accumulation supporting long-term growth objectives.
Decomposition of ROIC
Coca-Cola Co., 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 exhibited a declining trend over the analyzed period. It started at 32.86% in 2020, slightly increased to 33.91% in 2021, and then decreased steadily to 29.15% in 2022, followed by further small declines to 28.85% in 2023 and 28.63% in 2024. This indicates a gradual reduction in operational profitability relative to revenue after 2021.
- Turnover of Capital (TO)
- Turnover of capital showed consistent growth from 0.44 in 2020 to 0.55 in 2023, indicating improved efficiency in utilizing capital to generate revenue. The ratio remained stable at 0.54 in 2024, suggesting that capital utilization efficiency stabilized after reaching a peak.
- 1 – Effective Cash Tax Rate (CTR)
- The complementary measure to the effective cash tax rate fluctuated in a narrow range, beginning at 79.71% in 2020, peaking at 85.45% in 2021, then decreasing slightly to 80.74% in 2022. It rose again to 82.46% in 2023 before declining moderately to 81.23% in 2024. These patterns imply some variability in tax rate effectiveness, with relatively high retained earnings after tax over the period.
- Return on Invested Capital (ROIC)
- Return on invested capital improved from 11.43% in 2020 to a peak of 13.95% in 2021. It then declined to 12.66% in 2022 but experienced a recovery to 13.03% in 2023. The ROIC slightly decreased again to 12.6% in 2024. Overall, ROIC shows moderate improvement with some fluctuations, reflecting variations in the company's ability to generate returns from its invested capital.
Operating Profit Margin (OPM)
Coca-Cola 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 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Net operating revenues | ||||||
| Profitability Ratio | ||||||
| OPM3 | ||||||
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International 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 ÷ Net operating revenues
= 100 × ÷ =
4 Click competitor name to see calculations.
- Net Operating Profit Before Taxes (NOPBT)
- The net operating profit before taxes exhibited an upward trend from 2020 to 2024. Starting at 10,850 million USD in 2020, it increased significantly to 13,109 million USD in 2021. Although there was a slight decline in 2022 to 12,534 million USD, the figure rebounded in the subsequent years, reaching 13,198 million USD in 2023 and continuing to rise to 13,475 million USD by 2024. This overall growth indicates improved profitability before tax considerations over the five-year period.
- Net Operating Revenues
- Net operating revenues showed consistent growth throughout the period. Beginning at 33,014 million USD in 2020, revenues increased annually, reaching 38,655 million USD in 2021, 43,004 million USD in 2022, 45,754 million USD in 2023, and 47,061 million USD in 2024. This steady rise in revenues reflects positive sales growth and potentially expanded market reach or pricing strength over the years analyzed.
- Operating Profit Margin (OPM)
- The operating profit margin experienced a declining trend despite the increase in absolute profit and revenues. The margin peaked at 33.91% in 2021, up from 32.86% in 2020, but then dropped to 29.15% in 2022, followed by slight decreases to 28.85% in 2023 and 28.63% in 2024. This decline in margin suggests that while revenues and profits grew, operating costs or expenses increased at a faster rate, reducing overall efficiency or profitability relative to sales.
Turnover of Capital (TO)
Coca-Cola 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) | ||||||
| Net operating revenues | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International 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 = Net operating revenues ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
- Net Operating Revenues
- Net operating revenues exhibit a continuous upward trend over the five-year period. Starting from 33,014 million US dollars at the end of 2020, revenues increased to 38,655 million in 2021, then further rose to 43,004 million in 2022. The growth continued, albeit at a decelerating pace, reaching 45,754 million in 2023 and 47,061 million in 2024. Overall, the revenues grew steadily each year, reflecting consistent expansion in operating income.
- Invested Capital
- Invested capital shows a general increasing trend across the period. It started at 75,674 million US dollars in 2020 and rose to 80,311 million in 2021. A slight decrease is observed in 2022, where invested capital declined marginally to 79,959 million. From 2022 onward, the invested capital increased again, reaching 83,542 million in 2023 and further ascending to 86,857 million in 2024. This pattern indicates a steady commitment to increasing assets employed in operations, with a brief dip in 2022 before resuming growth.
- Turnover of Capital (TO)
- The turnover of capital ratio, representing efficiency in using invested capital to generate revenues, improved from 0.44 in 2020 to 0.48 in 2021. It continued to increase, reaching a peak of 0.55 in 2023. In 2024, the ratio declined slightly to 0.54 but remained above previous years except 2023. This suggests an overall improvement in the effectiveness of capital utilization over the period, with a minor reduction in efficiency in the final year.
Effective Cash Tax Rate (CTR)
Coca-Cola 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 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Tax Rate | ||||||
| CTR3 | ||||||
| Benchmarks | ||||||
| CTR, Competitors4 | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International 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 yet generally increasing trend over the analyzed period. After declining from $2,201 million in 2020 to $1,907 million in 2021, the taxes rose significantly to $2,414 million in 2022. There was a slight decrease to $2,314 million in 2023, followed by a notable increase to $2,529 million in 2024, indicating higher tax outflows in recent years.
- Net Operating Profit Before Taxes (NOPBT)
- The NOPBT exhibits a generally upward trajectory, signaling growth in operating profitability before tax payments. Starting at $10,850 million in 2020, it increased markedly to $13,109 million in 2021. Although there was a slight decline to $12,534 million in 2022, the profit rose again to $13,198 million in 2023 and further to $13,475 million in 2024, reflecting resilience and a positive trend in operating earnings.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate experienced considerable variation during the period. The rate was 20.29% in 2020, followed by a substantial decrease to 14.55% in 2021. It then increased to 19.26% in 2022, fell again to 17.54% in 2023, before slightly rising to 18.77% in 2024. This variability suggests fluctuating tax efficiencies or changes in tax policy and deductions impacting the effective tax burden on the operating profits.
- Overall Insights
- The data reveals that while operating profits before tax generally improved over the five-year span, the tax payments and effective tax rate displayed notable volatility. The increase in cash operating taxes in recent years, despite some fluctuations in the effective tax rate, aligns with higher profitability levels. The fluctuating effective tax rate suggests the company may have faced changing tax environments or utilized variable tax planning strategies. These trends collectively depict a dynamic tax and profitability profile that warrants continued monitoring for impacts on net earnings and cash flows.