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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- Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Price to FCFE (P/FCFE)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Equity (ROE) since 2010
- Return on Assets (ROA) since 2010
- Price to Book Value (P/BV) since 2010
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Return on Invested Capital (ROIC)
Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | ||||||
Net operating profit after taxes (NOPAT)1 | ||||||
Invested capital2 | ||||||
Performance Ratio | ||||||
ROIC3 | ||||||
Benchmarks | ||||||
ROIC, Competitors4 | ||||||
Boeing Co. | ||||||
Caterpillar Inc. | ||||||
Eaton Corp. plc | ||||||
GE Aerospace | ||||||
Honeywell International Inc. | ||||||
Lockheed Martin Corp. | ||||||
RTX Corp. |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 NOPAT. See details »
2 Invested capital. See details »
3 2021 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 demonstrated a consistent upward trend over the analyzed period. Starting at 230,606 thousand US dollars in 2017, NOPAT increased steadily each year, reaching 641,346 thousand US dollars by 2021. This represents a nearly threefold growth over the five-year span, indicating improving operational profitability and efficient tax management.
- Invested Capital
- Invested capital also showed a significant and continuous increase throughout the years. Beginning at 1,710,524 thousand US dollars in 2017, the figure rose every year, reaching 3,771,373 thousand US dollars by the end of 2021. This more than doubling of invested capital suggests ongoing investments either in assets, operations, or working capital to support business growth and expansion.
- Return on Invested Capital (ROIC)
- The return on invested capital experienced fluctuations but generally presented an increasing trend over the period reviewed. Starting at 13.48% in 2017, ROIC grew to a peak of 16.07% in 2018, dipped slightly to 14.51% in 2019, then improved again to 15.72% in 2020, and ultimately reached 17.01% in 2021. The overall increase implies enhanced efficiency in utilizing capital to generate profits, despite some year-to-year variability.
Decomposition of ROIC
ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
---|---|---|---|---|---|---|---|
Dec 31, 2021 | = | × | × | ||||
Dec 31, 2020 | = | × | × | ||||
Dec 31, 2019 | = | × | × | ||||
Dec 31, 2018 | = | × | × | ||||
Dec 31, 2017 | = | × | × |
Based on: 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), 10-K (reporting date: 2017-12-31).
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 an overall upward trend across the period, increasing from 15.96% in 2017 to 20.89% in 2021. There was a slight dip in 2019 to 17.29% after rising to 18.24% in 2018, but the margin subsequently increased in 2020 and 2021, reaching its highest point at 20.89%, indicating improved operational efficiency and profitability.
- Turnover of Capital (TO)
- The turnover of capital ratio showed relative stability over the five-year span, fluctuating narrowly between 0.93 and 1.03. Starting at 0.99 in 2017, it slightly rose to 1.03 in 2018, then decreased to 0.99 in 2019 and further to 0.93 in 2020, before recovering back to 1.00 in 2021. This pattern suggests consistent effectiveness in utilizing capital to generate sales, with minor variations.
- 1 – Effective Cash Tax Rate (CTR)
- This metric declined gradually from 85.38% in 2017 to 81.69% in 2021, indicating a modest reduction in the proportion of earnings retained after taxes. The steady decrease implies an improving tax efficiency or changes in tax structures affecting the company’s cash tax obligations over time.
- Return on Invested Capital (ROIC)
- The return on invested capital witnessed fluctuations but maintained an overall positive trajectory, increasing from 13.48% in 2017 to 17.01% in 2021. It peaked at 16.07% in 2018, dipped to 14.51% in 2019, then rose again through 2020 and 2021. The upward movement demonstrates enhanced profitability from the capital invested and an improving ability to generate returns.
Operating Profit Margin (OPM)
Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 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 related to extended warranties | ||||||
Adjusted net sales | ||||||
Profitability Ratio | ||||||
OPM3 | ||||||
Benchmarks | ||||||
OPM, Competitors4 | ||||||
Boeing Co. | ||||||
Caterpillar Inc. | ||||||
Eaton Corp. plc | ||||||
GE Aerospace | ||||||
Honeywell International Inc. | ||||||
Lockheed Martin Corp. | ||||||
RTX Corp. |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2021 Calculation
OPM = 100 × NOPBT ÷ Adjusted net sales
= 100 × ÷ =
4 Click competitor name to see calculations.
Over the five-year period, the company demonstrated consistent growth in key financial metrics, reflecting an overall positive trajectory in operational performance and profitability.
- Net Operating Profit Before Taxes (NOPBT)
- The net operating profit before taxes increased steadily each year, starting from approximately $270.1 million in 2017 and reaching $785.1 million by 2021. This represents a near threefold increase over the period, indicating strong growth in profitability before tax considerations.
- Adjusted Net Sales
- Adjusted net sales also showed continuous expansion, rising from about $1.69 billion in 2017 to $3.76 billion in 2021. The growth was particularly notable between 2020 and 2021, where sales increased by over 50%, suggesting a significant surge in market demand or effective sales strategies during this timeframe.
- Operating Profit Margin (OPM)
- The operating profit margin improved from 15.96% in 2017 to 20.89% in 2021. Although there was a slight dip in 2019, the margin generally trended upwards, with marked improvements in 2020 and 2021. This increase in OPM indicates enhanced operational efficiency and the company's ability to generate more profit per dollar of sales over time.
In summary, the data reflects sustained growth in adjusted net sales paired with increasing operational profitability. The company succeeded in expanding revenue substantially while also improving profit margins, suggesting effective management of costs and successful scaling of operations.
Turnover of Capital (TO)
Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | ||||||
Net sales | ||||||
Add: Increase (decrease) in deferred revenue related to extended warranties | ||||||
Adjusted net sales | ||||||
Invested capital1 | ||||||
Efficiency Ratio | ||||||
TO2 | ||||||
Benchmarks | ||||||
TO, Competitors3 | ||||||
Boeing Co. | ||||||
Caterpillar Inc. | ||||||
Eaton Corp. plc | ||||||
GE Aerospace | ||||||
Honeywell International Inc. | ||||||
Lockheed Martin Corp. | ||||||
RTX Corp. |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 Invested capital. See details »
2 2021 Calculation
TO = Adjusted net sales ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
- Adjusted Net Sales
- Adjusted net sales have displayed a consistent upward trend over the five-year period. Beginning at approximately $1.69 billion in 2017, sales increased steadily each year, reaching about $3.76 billion by the end of 2021. The most significant growth occurred between 2020 and 2021, where sales rose by over 50%, indicating a substantial acceleration in revenue generation.
- Invested Capital
- Invested capital has similarly increased throughout the observed period, starting at roughly $1.71 billion in 2017 and growing each year to approximately $3.77 billion in 2021. The annual increments were relatively steady, with notable expansions in capital investment occurring particularly from 2020 to 2021, mirroring the sharp rise in net sales during that interval.
- Turnover of Capital (TO)
- Turnover of capital, representing the efficiency with which the invested capital is utilized to generate sales, has remained relatively stable with minor fluctuations around the value of 1. Beginning near 0.99 in 2017, it slightly improved to 1.03 in 2018, before dipping back close to 0.99 in 2019. A decline followed in 2020 to 0.93, signaling a reduction in capital efficiency that year. However, turnover recovered to a value of 1.00 in 2021, suggesting a return to previous levels of capital utilization efficiency.
- Overall Analysis
- The data indicates that both adjusted net sales and invested capital have grown substantially over the five-year horizon, with the most pronounced expansion occurring in the latest year. Despite this growth, capital turnover has shown moderate volatility but effectively remained constant, implying that the company has maintained a steady balance between investment and sales generation efficiency. The dip in turnover in 2020 could reflect external pressures or operational challenges that were overcome by 2021, coinciding with strong sales performance and enhanced capital deployment.
Effective Cash Tax Rate (CTR)
Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ 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 | ||||||
Boeing Co. | ||||||
Caterpillar Inc. | ||||||
Eaton Corp. plc | ||||||
GE Aerospace | ||||||
Honeywell International Inc. | ||||||
Lockheed Martin Corp. | ||||||
RTX Corp. |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2021 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × ÷ =
4 Click competitor name to see calculations.
- Net Operating Profit Before Taxes (NOPBT)
- The net operating profit before taxes exhibited a strong upward trend over the five-year period, rising from $270.1 million in 2017 to $785.1 million in 2021. This represents nearly a threefold increase, indicating significant growth in operating profitability.
- Cash Operating Taxes
- Cash operating taxes also increased substantially, from $39.5 million in 2017 to $143.7 million in 2021. The rise in cash taxes corresponds with the increase in operating profits, reflecting higher tax obligations due to improved earnings.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate showed a gradual upward trend, moving from approximately 14.6% in 2017 to 18.3% in 2021. This suggests that a larger proportion of pre-tax operating income was paid as cash taxes over time, possibly indicating changes in tax policy, reductions in tax credits or deductions, or shifts in the geographic mix of taxable income.
- Overall Observations
- The company demonstrated strong and consistent growth in operating profitability during the period analyzed, with net operating profit before taxes increasing significantly year over year. While the cash tax payments increased correspondingly, the incremental rise in the effective cash tax rate suggests slightly increasing tax burdens relative to operating income. This combination of rising profitability and a moderate increase in tax rate implies healthy operational performance alongside evolving tax dynamics.