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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- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Geographic Areas
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2005
- Return on Equity (ROE) since 2005
- Analysis of Revenues
- Aggregate Accruals
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Return on Invested Capital (ROIC)
ConocoPhillips, ROIC calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| ROIC3 | ||||||
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| Chevron Corp. | ||||||
| Exxon Mobil Corp. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 NOPAT. See details »
2 Invested capital. See details »
3 2025 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The period under review demonstrates significant fluctuations in Return on Invested Capital (ROIC). Net operating profit after taxes (NOPAT) and invested capital both experienced changes over the five-year span, impacting the overall ROIC performance.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT increased substantially from 2021 to 2022, more than doubling to 21,159 US$ millions. However, this was followed by a decline in 2023 to 12,357 US$ millions, and continued to decrease in subsequent years, reaching 8,950 US$ millions by 2025. This indicates a weakening profitability trend after the initial surge.
- Invested Capital
- Invested capital remained relatively stable between 2021 and 2023, with a slight decrease in 2022. A notable increase occurred in 2024, rising to 106,371 US$ millions, before decreasing slightly to 105,245 US$ millions in 2025. The increase in invested capital in 2024 suggests potential expansion or significant capital expenditures.
- Return on Invested Capital (ROIC)
- ROIC mirrored the NOPAT trend. It rose dramatically from 13.45% in 2021 to a peak of 28.02% in 2022. Subsequently, ROIC declined consistently, falling to 15.20% in 2023, 9.38% in 2024, and further to 8.50% in 2025. This downward trajectory suggests diminishing returns on invested capital despite the increase in invested capital in 2024. The decline in ROIC, coupled with the increasing invested capital, warrants further investigation into the efficiency of capital allocation.
The substantial increase in ROIC in 2022 was not sustained, and the subsequent years show a clear deterioration in the metric. While invested capital increased in 2024, the corresponding decrease in NOPAT resulted in a further reduction in ROIC, indicating that the company’s ability to generate profit from its invested capital is weakening.
Decomposition of ROIC
ConocoPhillips, decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2025 | = | × | × | ||||
| Dec 31, 2024 | = | × | × | ||||
| Dec 31, 2023 | = | × | × | ||||
| Dec 31, 2022 | = | × | × | ||||
| Dec 31, 2021 | = | × | × |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
The period demonstrates significant fluctuations in the components of return on invested capital. Overall, return on invested capital exhibits a peak in 2022 followed by a decline through 2025. This movement is attributable to offsetting changes in operating profit margin, capital turnover, and the impact of taxes.
- Operating Profit Margin (OPM)
- Operating profit margin increased substantially from 2021 to 2022, rising from 29.99% to 36.63%. However, this was followed by a consistent decline through 2025, reaching 22.38%. This suggests decreasing profitability from core operations over the analyzed timeframe.
- Turnover of Capital (TO)
- Turnover of capital experienced a marked increase from 0.60 in 2021 to 1.04 in 2022, indicating improved efficiency in utilizing capital to generate revenue. Subsequently, capital turnover decreased to 0.51 in 2024 before a slight recovery to 0.56 in 2025. This suggests a weakening in the ability to generate sales from each unit of capital employed, although the decline appears to have stabilized in the most recent year.
- Effective Cash Tax Rate Adjustment (1 – CTR)
- The factor representing one minus the effective cash tax rate remained relatively stable between 2021 and 2023, fluctuating around 74%. A noticeable decrease is observed in 2024 and 2025, falling to 70.62% and 67.84% respectively. This indicates a rising effective tax rate, reducing the portion of operating profit available to investors.
- Return on Invested Capital (ROIC)
- Return on invested capital peaked at 28.02% in 2022, driven by improvements in both operating profit margin and capital turnover. The subsequent decline to 8.50% in 2025 reflects the combined impact of decreasing operating profit margin, reduced capital turnover, and a lower tax benefit factor. The largest decrease occurred between 2022 and 2023, and then again between 2023 and 2024.
The interplay between these factors suggests that while initial gains were achieved through improved profitability and efficient capital utilization, subsequent performance was negatively impacted by declining margins, reduced asset efficiency, and increasing tax obligations. The trend indicates a weakening of capital allocation effectiveness over the period.
Operating Profit Margin (OPM)
ConocoPhillips, OPM calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Sales and other operating revenues | ||||||
| Profitability Ratio | ||||||
| OPM3 | ||||||
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| Chevron Corp. | ||||||
| Exxon Mobil Corp. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2025 Calculation
OPM = 100 × NOPBT ÷ Sales and other operating revenues
= 100 × ÷ =
4 Click competitor name to see calculations.
The operating profit margin exhibited significant fluctuation over the five-year period. Initial values were strong, followed by a decline, suggesting evolving profitability dynamics. Net operating profit before taxes also demonstrated considerable variability, mirroring the changes observed in the operating profit margin.
- Operating Profit Margin (OPM)
- The operating profit margin began at 29.99% in 2021, increasing substantially to 36.63% in 2022. This represents a period of heightened profitability. However, a subsequent decrease was observed in 2023, with the margin falling to 29.62%. This downward trend continued through 2024 and 2025, with the operating profit margin reaching 25.80% and 22.38% respectively. This indicates a consistent erosion of profitability over the latter part of the analyzed period.
- Net Operating Profit Before Taxes (NOPBT) and Sales Correlation
- Net operating profit before taxes increased significantly from US$13,743 million in 2021 to US$28,752 million in 2022, coinciding with the rise in sales and other operating revenues. However, NOPBT decreased to US$16,628 million in 2023, and continued to decline to US$14,126 million in 2024 and US$13,193 million in 2025. While sales experienced an increase between 2024 and 2025, the NOPBT continued its downward trajectory, suggesting increasing costs or pricing pressures.
The observed trends suggest a potential weakening of the company’s ability to translate sales into operating profit. The substantial increase in OPM in 2022 was not sustained, and the subsequent declines warrant further investigation into the underlying factors affecting profitability, such as cost of goods sold, operating expenses, and pricing strategies.
Turnover of Capital (TO)
ConocoPhillips, TO calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales and other operating revenues | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| Chevron Corp. | ||||||
| Exxon Mobil Corp. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Invested capital. See details »
2 2025 Calculation
TO = Sales and other operating revenues ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
The turnover of capital exhibited considerable fluctuation between 2021 and 2025. Initial values increased significantly before declining and stabilizing. A detailed examination of the observed trends follows.
- Sales and other operating revenues
- Sales demonstrated a substantial increase from 2021 to 2022, rising from US$45,828 million to US$78,494 million. This was followed by a decrease in 2023 to US$56,141 million, and a further slight decrease in 2024 to US$54,745 million. Revenues then experienced a modest recovery in 2025, reaching US$58,944 million.
- Invested capital
- Invested capital remained relatively stable between 2021 and 2022, fluctuating between US$75,520 million and US$76,355 million. A noticeable increase occurred in 2023, reaching US$81,278 million, followed by a more substantial rise in 2024 to US$106,371 million. Invested capital experienced a slight decrease in 2025, settling at US$105,245 million.
- Turnover of capital (TO)
- The turnover of capital began at 0.60 in 2021. A significant increase was observed in 2022, reaching 1.04. This was followed by a decline to 0.69 in 2023, and a more pronounced decrease to 0.51 in 2024. The ratio showed a slight improvement in 2025, increasing to 0.56. The fluctuations in TO suggest a changing relationship between sales generated and the capital employed to generate those sales.
The increase in TO from 2021 to 2022 coincided with a substantial rise in sales while invested capital remained relatively constant. The subsequent decline in TO from 2022 to 2024 appears to be driven by a combination of decreasing sales and increasing invested capital. The stabilization of TO in 2025 suggests a potential leveling off of these opposing forces, as both sales and invested capital experienced only minor changes.
Effective Cash Tax Rate (CTR)
ConocoPhillips, CTR calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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 | ||||||
| Chevron Corp. | ||||||
| Exxon Mobil Corp. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2025 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × ÷ =
4 Click competitor name to see calculations.
The effective cash tax rate exhibited an increasing trend over the five-year period. While cash operating taxes and net operating profit before taxes fluctuated, the relationship between these items resulted in a consistent rise in the percentage of profits paid as cash taxes.
- Effective Cash Tax Rate (CTR)
- In 2021, the effective cash tax rate was 25.25%. This rate increased to 26.41% in 2022, representing a 4.59 percentage point rise. A slight increase to 25.68% was observed in 2023. The rate then increased more substantially to 29.38% in 2024, and continued to climb to 32.16% in 2025. This represents a cumulative increase of 6.91 percentage points from 2021 to 2025.
Cash operating taxes demonstrated volatility. They increased significantly from US$3,469 million in 2021 to US$7,594 million in 2022, before decreasing to US$4,270 million in 2023. Taxes remained relatively stable at US$4,150 million and US$4,242 million in 2024 and 2025, respectively.
Net operating profit before taxes also showed fluctuation. It rose substantially from US$13,743 million in 2021 to US$28,752 million in 2022. Subsequently, NOPBT decreased to US$16,628 million in 2023, and continued to decline to US$14,126 million in 2024 and US$13,193 million in 2025. Despite the decrease in NOPBT in the later years, the effective cash tax rate continued to increase, indicating that the proportion of profits paid in taxes grew even as overall profitability declined.