Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Emerson Electric Co. (NYSE:EMR)

This company was transferred to the archive: financial data is no longer updated!

Return on Capital (ROC)

Advanced level

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)

Emerson Electric Co., ROIC calculation

Microsoft Excel LibreOffice Calc
Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 2,461  2,124  1,776  1,731  2,871  2,212 
Invested capital2 16,266  15,617  15,181  16,521  17,328  17,628 
Performance Ratio
ROIC3 15.13% 13.60% 11.70% 10.48% 16.57% 12.55%

Based on: 10-K (filing date: 2019-11-18), 10-K (filing date: 2018-11-19), 10-K (filing date: 2017-11-20), 10-K (filing date: 2016-11-16), 10-K (filing date: 2015-11-18), 10-K (filing date: 2014-11-19).

1 NOPAT. See details »

2 Invested capital. See details »

3 2019 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 2,461 ÷ 16,266 = 15.13%

Performance ratio Description The company
ROIC A measure of the periodic, after tax, cash-on-cash yield earned in the business. Emerson Electric Co.’s ROIC improved from 2017 to 2018 and from 2018 to 2019.

Decomposition of ROIC

Emerson Electric Co., decomposition of ROIC

Microsoft Excel LibreOffice Calc
ROIC = OPM1 × TO2 × 1 – CTR3
Sep 30, 2019 15.13% = 16.76% × 1.13 × 79.91%
Sep 30, 2018 13.60% = 16.44% × 1.11 × 74.23%
Sep 30, 2017 11.70% = 16.66% × 1.01 × 69.86%
Sep 30, 2016 10.48% = 17.30% × 0.88 × 68.89%
Sep 30, 2015 16.57% = 19.71% × 1.29 × 65.31%
Sep 30, 2014 12.55% = 14.70% × 1.39 × 61.34%

Based on: 10-K (filing date: 2019-11-18), 10-K (filing date: 2018-11-19), 10-K (filing date: 2017-11-20), 10-K (filing date: 2016-11-16), 10-K (filing date: 2015-11-18), 10-K (filing date: 2014-11-19).

1 Operating profit margin (OPM). See calculations »

2 Turnover of capital (TO). See calculations »

3 Effective cash tax rate (CTR). See calculations »

The primary reason for the increase in return on invested capital (ROIC) over 2019 year is the decrease in effective cash tax rate (CTR).


Operating Profit Margin (OPM)

Emerson Electric Co., OPM calculation

Microsoft Excel LibreOffice Calc
Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 2,461  2,124  1,776  1,731  2,871  2,212 
Add: Cash operating taxes2 619  737  766  782  1,525  1,394 
Net operating profit before taxes (NOPBT) 3,079  2,862  2,543  2,512  4,396  3,607 
 
Net sales 18,372  17,408  15,264  14,522  22,304  24,537 
Profitability Ratio
OPM3 16.76% 16.44% 16.66% 17.30% 19.71% 14.70%

Based on: 10-K (filing date: 2019-11-18), 10-K (filing date: 2018-11-19), 10-K (filing date: 2017-11-20), 10-K (filing date: 2016-11-16), 10-K (filing date: 2015-11-18), 10-K (filing date: 2014-11-19).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2019 Calculation
OPM = 100 × NOPBT ÷ Net sales
= 100 × 3,079 ÷ 18,372 = 16.76%

Profitability ratio Description The company
OPM The operating profit margin (OPM) is the ratio of pretax economic earnings, or NOPBT, to sales. Emerson Electric Co.’s OPM deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

Turnover of Capital (TO)

Emerson Electric Co., TO calculation

Microsoft Excel LibreOffice Calc
Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014
Selected Financial Data (US$ in millions)
Net sales 18,372  17,408  15,264  14,522  22,304  24,537 
Invested capital1 16,266  15,617  15,181  16,521  17,328  17,628 
Efficiency Ratio
TO2 1.13 1.11 1.01 0.88 1.29 1.39

Based on: 10-K (filing date: 2019-11-18), 10-K (filing date: 2018-11-19), 10-K (filing date: 2017-11-20), 10-K (filing date: 2016-11-16), 10-K (filing date: 2015-11-18), 10-K (filing date: 2014-11-19).

1 Invested capital. See details »

2 2019 Calculation
TO = Net sales ÷ Invested capital
= 18,372 ÷ 16,266 = 1.13

Efficiency ratio Description The company
TO The turnover of capital (TO) is the ratio of sales to invested capital. Capital turnover is a function of the efficiency of working capital management and of net fixed assets. Emerson Electric Co.’s TO improved from 2017 to 2018 and from 2018 to 2019.

Effective Cash Tax Rate (CTR)

Emerson Electric Co., CTR calculation

Microsoft Excel LibreOffice Calc
Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 2,461  2,124  1,776  1,731  2,871  2,212 
Add: Cash operating taxes2 619  737  766  782  1,525  1,394 
Net operating profit before taxes (NOPBT) 3,079  2,862  2,543  2,512  4,396  3,607 
Tax Rate
CTR3 20.09% 25.77% 30.14% 31.11% 34.69% 38.66%

Based on: 10-K (filing date: 2019-11-18), 10-K (filing date: 2018-11-19), 10-K (filing date: 2017-11-20), 10-K (filing date: 2016-11-16), 10-K (filing date: 2015-11-18), 10-K (filing date: 2014-11-19).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2019 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 619 ÷ 3,079 = 20.09%

Tax rate Description The company
CTR Effective cash tax rate on operating income. Emerson Electric Co.’s CTR decreased from 2017 to 2018 and from 2018 to 2019.