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’s debt and equity structure. It measures business productivity performance.
Return on Invested Capital (ROIC)
General Electric Co., ROIC calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | 4,395 | 1,994 | (19,486) | (7,006) | 13,899 | |
| Invested capital2 | 64,102 | 78,101 | 135,167 | 193,260 | 191,946 | |
| Performance Ratio | ||||||
| ROIC3 | 6.86% | 2.55% | -14.42% | -3.63% | 7.24% | |
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| 3M Co. | 14.91% | 12.09% | 17.81% | 16.68% | 17.55% | |
| Honeywell International Inc. | 10.85% | 15.49% | 18.15% | 10.39% | 13.51% | |
Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24).
1 NOPAT. See details »
2 Invested capital. See details »
3 2020 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 4,395 ÷ 64,102 = 6.86%
4 Click competitor name to see calculations.
| Performance ratio | Description | The company |
|---|---|---|
| ROIC | A measure of the periodic, after tax, cash-on-cash yield earned in the business. | General Electric Co.’s ROIC improved from 2018 to 2019 and from 2019 to 2020. |
Decomposition of ROIC
General Electric Co., decomposition of ROIC
Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24).
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 2020 year is the increase in profitability measured by operating profit margin (OPM) ratio.
Operating Profit Margin (OPM)
General Electric Co., OPM calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | 4,395 | 1,994 | (19,486) | (7,006) | 13,899 | |
| Add: Cash operating taxes2 | 2,843 | 2,494 | 4,004 | 3,450 | 460 | |
| Net operating profit before taxes (NOPBT) | 7,238 | 4,488 | (15,482) | (3,556) | 14,359 | |
| Sales of goods and services | 73,022 | 87,487 | 113,544 | 113,192 | 110,390 | |
| Profitability Ratio | ||||||
| OPM3 | 9.91% | 5.13% | -13.64% | -3.14% | 13.01% | |
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| 3M Co. | 22.89% | 18.87% | 22.64% | 25.01% | 23.97% | |
| Honeywell International Inc. | 20.26% | 21.22% | 20.84% | 17.60% | 17.75% | |
Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2020 Calculation
OPM = 100 × NOPBT ÷ Sales of goods and services
= 100 × 7,238 ÷ 73,022 = 9.91%
4 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| OPM | The operating profit margin (OPM) is the ratio of pretax economic earnings, or NOPBT, to sales. | General Electric Co.’s OPM improved from 2018 to 2019 and from 2019 to 2020. |
Turnover of Capital (TO)
General Electric Co., TO calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales of goods and services | 73,022 | 87,487 | 113,544 | 113,192 | 110,390 | |
| Invested capital1 | 64,102 | 78,101 | 135,167 | 193,260 | 191,946 | |
| Efficiency Ratio | ||||||
| TO2 | 1.14 | 1.12 | 0.84 | 0.59 | 0.58 | |
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| 3M Co. | 0.83 | 0.83 | 1.04 | 0.98 | 1.03 | |
| Honeywell International Inc. | 0.67 | 0.86 | 1.02 | 1.01 | 0.99 | |
Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24).
1 Invested capital. See details »
2 2020 Calculation
TO = Sales of goods and services ÷ Invested capital
= 73,022 ÷ 64,102 = 1.14
3 Click competitor name to see calculations.
| 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. | General Electric Co.’s TO improved from 2018 to 2019 and from 2019 to 2020. |
Effective Cash Tax Rate (CTR)
General Electric Co., CTR calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | 4,395 | 1,994 | (19,486) | (7,006) | 13,899 | |
| Add: Cash operating taxes2 | 2,843 | 2,494 | 4,004 | 3,450 | 460 | |
| Net operating profit before taxes (NOPBT) | 7,238 | 4,488 | (15,482) | (3,556) | 14,359 | |
| Tax Rate | ||||||
| CTR3 | 39.28% | 55.57% | — | — | 3.20% | |
| Benchmarks | ||||||
| CTR, Competitors4 | ||||||
| 3M Co. | 21.47% | 22.38% | 24.34% | 31.90% | 28.57% | |
| Honeywell International Inc. | 20.56% | 15.05% | 14.23% | 41.68% | 23.02% | |
Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2020 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 2,843 ÷ 7,238 = 39.28%
4 Click competitor name to see calculations.