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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Constellation Brands Inc. pages available for free this week:
- Income Statement
- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Current Ratio since 2005
- Price to Earnings (P/E) since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Debt
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Return on Invested Capital (ROIC)
Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | Feb 28, 2019 | Feb 28, 2018 | Feb 28, 2017 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Net operating profit after taxes (NOPAT)1 | |||||||
Invested capital2 | |||||||
Performance Ratio | |||||||
ROIC3 | |||||||
Benchmarks | |||||||
ROIC, Competitors4 | |||||||
Coca-Cola Co. | |||||||
Mondelēz International Inc. | |||||||
PepsiCo Inc. | |||||||
Philip Morris International Inc. |
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
1 NOPAT. See details »
2 Invested capital. See details »
3 2022 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT values show a general upward trend from February 2017 through February 2019, with a significant increase from approximately 1.89 billion USD to 4.19 billion USD. However, in the fiscal year ending February 29, 2020, there is a notable decline, with NOPAT turning negative at around -778 million USD. Following this, there is a recovery in the subsequent years, reaching approximately 2.69 billion USD in 2021, but then decreasing again to roughly 498 million USD in 2022.
- Invested Capital
- Invested capital shows a steady increase from February 2017 to February 2019, rising from approximately 17.4 billion USD to nearly 24.9 billion USD. After peaking in 2019, it declines in 2020 to about 21.8 billion USD and continues a slight downward trend in the following years, ending at approximately 20.5 billion USD in 2022.
- Return on Invested Capital (ROIC)
- ROIC mirrors the trends seen in NOPAT. It increases from 10.88% in 2017 to a peak of 16.83% in 2019. In 2020, ROIC becomes negative at -3.57%, aligning with the sharp drop in NOPAT and the decrease in invested capital. The ratio improves in 2021, reaching 12.65%, before falling again significantly to 2.43% in 2022.
- Summary of Trends and Insights
- Over the six-year period, the data reflects a volatile performance with a substantial peak in profitability and capital efficiency in 2019, followed by a sharp downturn in 2020 that likely reflects extraordinary challenges. Despite some recovery in 2021, profitability and capital returns decline again in 2022, signaling potential ongoing operational or market difficulties. Invested capital decreased after 2019, suggesting possible asset divestitures or capital restructuring during the downturn. Overall, the company experienced significant financial stress starting in 2020, which impacted its profitability and returns on invested capital.
Decomposition of ROIC
ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
---|---|---|---|---|---|---|---|
Feb 28, 2022 | = | × | × | ||||
Feb 28, 2021 | = | × | × | ||||
Feb 29, 2020 | = | × | × | ||||
Feb 28, 2019 | = | × | × | ||||
Feb 28, 2018 | = | × | × | ||||
Feb 28, 2017 | = | × | × |
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
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 experienced significant fluctuations over the period. From February 2017 to February 2019, the margin increased from 33.3% to a peak of 55.8%, indicating improved operational efficiency or profitability. However, in February 2020, there was a drastic decline to -5.96%, reflecting a loss at the operating level. The margin partially recovered to 34.2% in February 2021 but fell again to 8.96% in February 2022, suggesting ongoing challenges in maintaining profitability.
- Turnover of Capital (TO)
- The turnover of capital displayed relative stability with minor variations. The ratio was 0.42 in February 2017, slightly decreased to 0.33 by February 2019, then increased back to 0.44 by February 2022. This indicates a moderate fluctuation in how effectively the company utilized its capital to generate revenue, with no sustained trend upward or downward.
- 1 – Effective Cash Tax Rate (CTR)
- The effective cash tax rate showed an increasing trend from 77.58% in February 2017 to 100% in February 2020, which suggests the company was paying taxes at or near the full statutory rate. Following 2020, a decline occurred with the rate dropping to 62.2% by February 2022, possibly indicating improved tax planning, tax credits, or changes in taxable income.
- Return on Invested Capital (ROIC)
- The return on invested capital rose from 10.88% in February 2017 to a peak of 16.83% in February 2019, demonstrating enhanced capital efficiency and profitability. A sharp negative return of -3.57% was observed in February 2020, correlating with the decline in operating profit margin during the same period. A subsequent recovery occurred in 2021 to 12.65%, but ROIC declined again to 2.43% in February 2022, indicating volatility in the company's ability to generate returns from its invested capital.
Operating Profit Margin (OPM)
Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | Feb 28, 2019 | Feb 28, 2018 | Feb 28, 2017 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Net operating profit after taxes (NOPAT)1 | |||||||
Add: Cash operating taxes2 | |||||||
Net operating profit before taxes (NOPBT) | |||||||
Net sales | |||||||
Add: Increase (decrease) in deferred revenue | |||||||
Adjusted net sales | |||||||
Profitability Ratio | |||||||
OPM3 | |||||||
Benchmarks | |||||||
OPM, Competitors4 | |||||||
Coca-Cola Co. | |||||||
Mondelēz International Inc. | |||||||
PepsiCo Inc. | |||||||
Philip Morris International Inc. |
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2022 Calculation
OPM = 100 × NOPBT ÷ Adjusted net sales
= 100 × ÷ =
4 Click competitor name to see calculations.
- Net Operating Profit Before Taxes (NOPBT)
- The net operating profit before taxes exhibited a largely positive trend from 2017 through 2019, rising from approximately 2.44 billion US dollars to a peak of 4.53 billion US dollars in 2019. However, there was a significant decline in 2020, with the figure dropping to a negative 497 million US dollars, indicating a period of substantial operational challenges. This was followed by a recovery in 2021, with net operating profit before taxes rebounding to about 2.95 billion US dollars, though this was still below the 2019 peak. In 2022, the amount declined again to approximately 801 million US dollars, signaling ongoing volatility in profitability.
- Adjusted Net Sales
- Adjusted net sales demonstrated consistent growth over the six-year period. Sales increased steadily from 7.33 billion US dollars in 2017 to nearly 8.94 billion US dollars in 2022. This represents a compound increase of roughly 21.9% over the period, suggesting stable revenue expansion despite fluctuations in operating profitability.
- Operating Profit Margin (OPM)
- The operating profit margin followed a pattern that mirrors the net operating profit before taxes, with margins starting at 33.3% in 2017 and progressively rising to a high of 55.8% in 2019. In 2020, there was a notable negative margin of -5.96%, reflecting operational losses amidst likely adverse conditions. The margin recovered strongly in 2021 to 34.2% but then fell sharply to 8.96% in 2022, indicating reduced efficiency or increased operating costs relative to net sales in the most recent year.
- Overall Observations
- The data reveals a phase of robust profitability growth followed by a severe setback in 2020, likely due to external disruptive factors. Despite continuous growth in sales, profitability metrics showed significant volatility, with the years following the downturn characterized by partial recovery but not a return to earlier peak levels. Operating efficiency, as indicated by the profit margin, remains below the high levels seen prior to 2020, suggesting that the company may be facing challenges in cost management or market conditions affecting margins.
Turnover of Capital (TO)
Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | Feb 28, 2019 | Feb 28, 2018 | Feb 28, 2017 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Net sales | |||||||
Add: Increase (decrease) in deferred revenue | |||||||
Adjusted net sales | |||||||
Invested capital1 | |||||||
Efficiency Ratio | |||||||
TO2 | |||||||
Benchmarks | |||||||
TO, Competitors3 | |||||||
Coca-Cola Co. | |||||||
Mondelēz International Inc. | |||||||
PepsiCo Inc. | |||||||
Philip Morris International Inc. |
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
1 Invested capital. See details »
2 2022 Calculation
TO = Adjusted net sales ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
- Adjusted Net Sales
- The adjusted net sales of the company exhibit a consistent upward trend over the six-year period. Starting from approximately 7.33 billion USD in 2017, sales increased each year, reaching about 8.94 billion USD by 2022. The growth is steady without any decline, indicating a stable expansion in revenue generation.
- Invested Capital
- Invested capital shows variability over the period. It increased from roughly 17.4 billion USD in 2017 to a peak of approximately 24.9 billion USD in 2019. Following this peak, there is a noticeable decrease, with invested capital declining to nearly 20.5 billion USD by 2022. This suggests that the company may have optimized or reduced its capital base after 2019.
- Turnover of Capital (TO)
- The turnover of capital ratio reflects the efficiency with which the company utilizes its invested capital to generate sales. Initially, the ratio shows a slight decline from 0.42 in 2017 to 0.33 in 2019, indicating reduced efficiency in those years. However, after 2019, the turnover of capital improves steadily, reaching 0.44 by 2022. This improvement aligns with the reduction in invested capital and continual growth in sales, suggesting enhanced capital utilization in the later years.
Effective Cash Tax Rate (CTR)
Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | Feb 28, 2019 | Feb 28, 2018 | Feb 28, 2017 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Net operating profit after taxes (NOPAT)1 | |||||||
Add: Cash operating taxes2 | |||||||
Net operating profit before taxes (NOPBT) | |||||||
Tax Rate | |||||||
CTR3 | |||||||
Benchmarks | |||||||
CTR, Competitors4 | |||||||
Coca-Cola Co. | |||||||
Mondelēz International Inc. | |||||||
PepsiCo Inc. | |||||||
Philip Morris International Inc. |
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2022 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × ÷ =
4 Click competitor name to see calculations.
- Cash Operating Taxes
- The cash operating taxes demonstrate an overall declining trend from 2017 through 2021, dropping from approximately $547 million in 2017 to about $259 million in 2021. In 2022, however, this trend reverses as cash operating taxes increase to approximately $303 million. This suggests a relative reduction in tax outflows over several years, followed by a notable rise in the most recent year.
- Net Operating Profit Before Taxes (NOPBT)
- NOPBT shows considerable volatility across the reported period. Starting at around $2.44 billion in 2017, it rises steadily to about $4.53 billion in 2019, representing strong operational profitability before taxes. In 2020, there is a significant downturn with a negative value near -$497 million, indicating a loss at the operational level before taxes. The figure recovers in 2021 to nearly $2.95 billion and then declines sharply again in 2022 to approximately $801 million, reflecting ongoing fluctuations in operating profitability.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate illustrates a general decrease from 22.42% in 2017 to a low of 7.5% in 2019. There is a missing value for 2020, likely tied to the negative operating profit that year. The rate slightly increases again to 8.8% in 2021 before surging to 37.8% in 2022, representing a substantial increase in the proportion of cash taxes relative to operating profit, potentially influenced by the reduced profitability in 2022 compared to prior years.