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)
Decomposition of ROIC
Operating Profit Margin (OPM)
Turnover of Capital (TO)
Effective Cash Tax Rate (CTR)

Honeywell International Inc., 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	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.

Honeywell International Inc., decomposition of ROIC


	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.

Honeywell International Inc., 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	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.

Honeywell International Inc., 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)
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.

Honeywell International Inc., 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	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.

Honeywell International Inc. (NYSE:HON)

Return on Capital (ROC)

Return on Invested Capital (ROIC)

Decomposition of ROIC

Operating Profit Margin (OPM)

Turnover of Capital (TO)

Effective Cash Tax Rate (CTR)