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

Honeywell International Inc. (NYSE:HON)

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)

Honeywell International Inc., ROIC calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
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 5,331  6,640  7,720  4,165  5,407 
Invested capital2 49,130  42,865  42,543  40,104  40,005 
Performance Ratio
ROIC3 10.85% 15.49% 18.15% 10.39% 13.51%
Benchmarks
ROIC, Competitors4
3M Co. 14.91% 12.09% 17.81% 16.68% 17.55%
General Electric Co. 6.86% 2.55% -14.42% -3.63% 7.24%

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10).

1 NOPAT. See details »

2 Invested capital. See details »

3 2020 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 5,331 ÷ 49,130 = 10.85%

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. Honeywell International Inc.’s ROIC deteriorated from 2018 to 2019 and from 2019 to 2020.

Decomposition of ROIC

Honeywell International Inc., decomposition of ROIC

Microsoft Excel LibreOffice Calc
ROIC = OPM1 × TO2 × 1 – CTR3
Dec 31, 2020 10.85% = 20.26% × 0.67 × 79.44%
Dec 31, 2019 15.49% = 21.22% × 0.86 × 84.95%
Dec 31, 2018 18.15% = 20.84% × 1.02 × 85.77%
Dec 31, 2017 10.39% = 17.60% × 1.01 × 58.32%
Dec 31, 2016 13.51% = 17.75% × 0.99 × 76.98%

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10).

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 decrease in return on invested capital (ROIC) over 2020 year is the decrease in efficiency measured by turnover of capital (TO) ratio.


Operating Profit Margin (OPM)

Honeywell International Inc., OPM calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
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 5,331  6,640  7,720  4,165  5,407 
Add: Cash operating taxes2 1,380  1,176  1,281  2,977  1,617 
Net operating profit before taxes (NOPBT) 6,711  7,816  9,001  7,142  7,023 
 
Net sales 32,637  36,709  41,802  40,534  39,302 
Add: Increase (decrease) in customer advances and deferred income 488  133  1,393  42  270 
Adjusted net sales 33,125  36,842  43,195  40,576  39,572 
Profitability Ratio
OPM3 20.26% 21.22% 20.84% 17.60% 17.75%
Benchmarks
OPM, Competitors4
3M Co. 22.89% 18.87% 22.64% 25.01% 23.97%
General Electric Co. 9.91% 5.13% -13.64% -3.14% 13.01%

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2020 Calculation
OPM = 100 × NOPBT ÷ Adjusted net sales
= 100 × 6,711 ÷ 33,125 = 20.26%

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. Honeywell International Inc.’s OPM improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Turnover of Capital (TO)

Honeywell International Inc., TO calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Net sales 32,637  36,709  41,802  40,534  39,302 
Add: Increase (decrease) in customer advances and deferred income 488  133  1,393  42  270 
Adjusted net sales 33,125  36,842  43,195  40,576  39,572 
 
Invested capital1 49,130  42,865  42,543  40,104  40,005 
Efficiency Ratio
TO2 0.67 0.86 1.02 1.01 0.99
Benchmarks
TO, Competitors3
3M Co. 0.83 0.83 1.04 0.98 1.03
General Electric Co. 1.14 1.12 0.84 0.59 0.58

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10).

1 Invested capital. See details »

2 2020 Calculation
TO = Adjusted net sales ÷ Invested capital
= 33,125 ÷ 49,130 = 0.67

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. Honeywell International Inc.’s TO deteriorated from 2018 to 2019 and from 2019 to 2020.

Effective Cash Tax Rate (CTR)

Honeywell International Inc., CTR calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
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 5,331  6,640  7,720  4,165  5,407 
Add: Cash operating taxes2 1,380  1,176  1,281  2,977  1,617 
Net operating profit before taxes (NOPBT) 6,711  7,816  9,001  7,142  7,023 
Tax Rate
CTR3 20.56% 15.05% 14.23% 41.68% 23.02%
Benchmarks
CTR, Competitors4
3M Co. 21.47% 22.38% 24.34% 31.90% 28.57%
General Electric Co. 39.28% 55.57% 3.20%

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2020 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 1,380 ÷ 6,711 = 20.56%

4 Click competitor name to see calculations.

Tax rate Description The company
CTR Effective cash tax rate on operating income. Honeywell International Inc.’s CTR increased from 2018 to 2019 and from 2019 to 2020.