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Illinois Tool Works Inc. (ITW)
Return on Capital (ROC)
Difficulty: Advanced
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)
Illinois Tool Works Inc., ROIC calculation
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
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| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | |
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| Invested capital2 | |
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| Performance Ratio | ||||||
| ROIC3 | |
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Based on: 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12), 10-K (filing date: 2015-02-13).
1 NOPAT. See details »
2 Invested capital. See details »
3 2018 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × ÷ =
| Performance ratio | Description | The company |
|---|---|---|
| ROIC | A measure of the periodic, after tax, cash-on-cash yield earned in the business. | Illinois Tool Works Inc.’s ROIC deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |