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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- Analysis of Solvency Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Enterprise Value (EV)
- Enterprise Value to FCFF (EV/FCFF)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Price to Operating Profit (P/OP) since 2005
- Analysis of Revenues
- Analysis of Debt
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Return on Invested Capital (ROIC)
Fidelity National Information Services Inc., ROIC calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| ROIC3 | ||||||
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
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)
- Over the analyzed period, NOPAT exhibited significant volatility. It started at 889 million USD in 2018, followed by a sharp decline to 578 million USD in 2019 and further dropped to 325 million USD in 2020. A rebound was observed in 2021 with a rise to 524 million USD. However, in 2022, there was a dramatic downturn, with NOPAT falling to a substantial negative value of -17,009 million USD, indicating a severe loss or exceptional charges during that year.
- Invested Capital
- Invested capital experienced a marked increase from 22,222 million USD in 2018 to a peak of 75,448 million USD in 2019. It remained relatively stable in 2020 at 75,049 million USD and then slightly decreased in 2021 to 73,331 million USD. In 2022, invested capital decreased significantly to 52,862 million USD, reflecting a notable divestment or reduction in capital deployment.
- Return on Invested Capital (ROIC)
- ROIC mirrored the trends seen in profitability. Starting at 4% in 2018, it sharply declined to 0.77% in 2019 and further reduced to 0.43% in 2020. A marginal recovery was observed in 2021, rising to 0.72%. Nonetheless, 2022 saw a drastic decline to -32.18%, reflecting the negative NOPAT and indicating the company incurred a significant loss relative to its invested capital in that year.
- Overall Analysis
- The data reveal a period marked by increasing invested capital until 2019-2020, followed by a reduction in 2022. Profitability, as measured by both NOPAT and ROIC, showed a declining trend from 2018 through 2020, a slight rebound in 2021, and a severe deterioration in 2022. The sharp negative values in 2022 suggest exceptional adverse events affecting earnings and capital efficiency, overshadowing the earlier years' modest recovery. The decline in invested capital in 2022 might indicate strategic adjustments or responses to financial stress.
Decomposition of ROIC
Fidelity National Information Services Inc., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2022 | = | × | × | ||||
| Dec 31, 2021 | = | × | × | ||||
| Dec 31, 2020 | = | × | × | ||||
| Dec 31, 2019 | = | × | × | ||||
| Dec 31, 2018 | = | × | × |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
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 declined significantly over the period analyzed. It started at a positive 15.31% in 2018 and decreased sharply to 8.35% in 2019. The downward trend continued with lower margins of 5.6% in 2020 and a slight improvement to 7.43% in 2021. However, in 2022, the margin experienced a dramatic negative shift, dropping to -110.46%, indicating substantial operating losses during that year.
- Turnover of Capital (TO)
- The turnover of capital showed a generally weak but slightly improving trend. It began at 0.38 in 2018, fell to a low of 0.14 in 2019, then improved marginally to 0.17 in 2020 and 0.19 in 2021. The ratio increased more notably to 0.27 in 2022, suggesting some enhancement in the efficiency of using invested capital to generate revenue, although the values remain relatively low overall.
- 1 – Effective Cash Tax Rate (CTR)
- This metric exhibited a declining trend from 69.54% in 2018 to 46.03% in 2020, implying an increase in the effective cash tax rate over this interval. It fluctuated slightly to 50.79% in 2021 before jumping to a full 100% in 2022. The increase to 100% suggests that the company utilized all its operating cash flow for tax payments or had a zero net cash tax shield effect in the final year observed.
- Return on Invested Capital (ROIC)
- The return on invested capital demonstrated a notable decrease throughout the period. It started at 4% in 2018 and declined steeply to 0.77% in 2019, followed by further decreases to 0.43% in 2020 and a slight recovery to 0.72% in 2021. In 2022, the ROIC plunged dramatically to -32.18%, reflecting a significant loss on the capital invested and poor financial performance during that year.
Operating Profit Margin (OPM)
Fidelity National Information Services Inc., OPM calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenue | ||||||
| Profitability Ratio | ||||||
| OPM3 | ||||||
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2022 Calculation
OPM = 100 × NOPBT ÷ Adjusted revenue
= 100 × ÷ =
4 Click competitor name to see calculations.
- Net Operating Profit Before Taxes (NOPBT)
- The NOPBT experienced a declining trend from 2018 to 2020, decreasing from $1,278 million to $706 million. In 2021, there was a partial recovery with NOPBT rising to $1,033 million. However, the company faced a significant downturn in 2022, with NOPBT sharply falling to a negative value of -$16,046 million, indicating a substantial operating loss before taxes.
- Adjusted Revenue
- Adjusted revenue showed a consistent upward trend throughout the period. Starting at $8,347 million in 2018, it increased steadily each year to reach $14,527 million in 2022. The growth appears to be sustained, reflecting increasing sales or service income over the five years.
- Operating Profit Margin (OPM)
- The operating profit margin declined markedly from 15.31% in 2018 to 5.6% in 2020, indicating reduced profitability relative to revenue. There was a minor recovery in 2021 where the margin increased to 7.43%. However, in 2022 the margin dramatically deteriorated to -110.46%, highlighting substantial operating inefficiencies or extraordinary expenses leading to large losses relative to revenue.
- Overall Insights
- Despite steady growth in adjusted revenue over the years, profitability metrics reveal a concerning decline, culminating in a significant operating loss in 2022. The mismatch between increasing revenue and sharply deteriorating NOPBT and OPM in 2022 suggests exceptional negative events or cost escalations that severely impacted operating performance. Prior years showed a consistent decline in profit margin and operating profit, emphasizing a long-term pressure on profitability before the sharp drop in 2022.
Turnover of Capital (TO)
Fidelity National Information Services Inc., TO calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenue | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Invested capital. See details »
2 2022 Calculation
TO = Adjusted revenue ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
- Revenue Trend
- The adjusted revenue exhibits a consistent upward trajectory from 2018 through 2022. Starting at 8,347 million US dollars in 2018, it steadily increased each year, reaching 14,527 million US dollars by 2022. This reflects strong revenue growth over the five-year period with notable increments particularly between 2018 and 2020.
- Invested Capital Trend
- Invested capital shows significant fluctuation over the period analyzed. It increased sharply from 22,222 million US dollars in 2018 to a peak of 75,448 million US dollars in 2019. Subsequently, it slightly decreased but remained relatively stable around 73,000 to 75,000 million US dollars during 2020 and 2021. There was a marked reduction in 2022, with invested capital declining to 52,862 million US dollars.
- Turnover of Capital (TO) Analysis
- The turnover of capital ratio indicates efficiency in using invested capital to generate revenue. It started at 0.38 in 2018, which then decreased significantly to 0.14 in 2019, coinciding with the substantial increase in invested capital that year. Afterwards, the ratio showed a gradual improvement, climbing from 0.17 in 2020 to 0.27 in 2022. Despite this recovery, the turnover in 2022 remains below the level observed in 2018.
- Overall Insights
- The data reveals that while the company has consistently grown its revenue, the invested capital experienced considerable expansion in 2019 followed by a reduction in recent years. The capital turnover ratio suggests that the efficiency in utilizing capital to generate revenue decreased sharply when invested capital rose dramatically but improved as the invested capital was managed downwards. This pattern might indicate strategic capital deployment and subsequent optimization in operation efficiency.
Effective Cash Tax Rate (CTR)
Fidelity National Information Services Inc., CTR calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| 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 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
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 display an overall upward trend from 2018 through 2022. Initially, the amount decreased from $389 million in 2018 to $290 million in 2019 but then rose progressively, reaching $962 million in 2022, nearly tripling compared to the 2019 value. This increase suggests a growing tax burden or improved cash tax payments over time.
- Net Operating Profit Before Taxes (NOPBT)
- NOPBT experienced significant fluctuations during the five-year period. It declined from $1,278 million in 2018 to a low of $706 million in 2020, reflecting a downward trend over the first three years. However, a recovery occurred in 2021 with NOPBT increasing to $1,033 million. In 2022, there was a dramatic and adverse shift to a negative figure of -$16,046 million, indicating a substantial operating loss before taxes in that year, which diverges sharply from the prior positive profits.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate showed a rising trend from 2018 to 2020, increasing from 30.46% to a peak of 53.97%, which indicates a growing proportion of taxes paid relative to operating profits. In 2021, the tax rate decreased slightly to 49.21%. No data is available for 2022, likely related to the significant operating loss in that year that could have nullified taxable income.