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.

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

Linde plc, ROIC calculation

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)¹	6,386)	3,833)	3,800)	2,699)	2,416)
Invested capital²	73,409)	72,341)	72,560)	78,771)	78,533)
Performance Ratio
ROIC³	8.70%	5.30%	5.24%	3.43%	3.08%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ NOPAT. See details »

² Invested capital. See details »

³ 2023 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 6,386 ÷ 73,409 = 8.70%

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Performance ratio	Description	The company
ROIC	A measure of the periodic, after tax, cash-on-cash yield earned in the business.	Linde plc ROIC improved from 2021 to 2022 and from 2022 to 2023.

Linde plc, decomposition of ROIC


	ROIC	=	OPM¹	×	TO²	×	1 – CTR³
Dec 31, 2023	8.70%	=	25.36%	×	0.45	×	76.64%
Dec 31, 2022	5.30%	=	16.99%	×	0.46	×	67.63%
Dec 31, 2021	5.24%	=	17.33%	×	0.42	×	71.20%
Dec 31, 2020	3.43%	=	14.48%	×	0.35	×	68.44%
Dec 31, 2019	3.08%	=	12.41%	×	0.36	×	68.99%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

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 2023 year is the increase in profitability measured by operating profit margin (OPM) ratio.

Linde plc, OPM calculation

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)¹	6,386)	3,833)	3,800)	2,699)	2,416)
Add: Cash operating taxes²	1,947)	1,835)	1,537)	1,245)	1,086)
Net operating profit before taxes (NOPBT)	8,332)	5,669)	5,337)	3,944)	3,502)

Sales	32,854)	33,364)	30,793)	27,243)	28,228)
Profitability Ratio
OPM³	25.36%	16.99%	17.33%	14.48%	12.41%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ NOPAT. See details »

² Cash operating taxes. See details »

³ 2023 Calculation
OPM = 100 × NOPBT ÷ Sales
= 100 × 8,332 ÷ 32,854 = 25.36%

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Profitability ratio	Description	The company
OPM	The operating profit margin (OPM) is the ratio of pretax economic earnings, or NOPBT, to sales.	Linde plc OPM deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Linde plc, TO calculation

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Sales	32,854)	33,364)	30,793)	27,243)	28,228)
Invested capital¹	73,409)	72,341)	72,560)	78,771)	78,533)
Efficiency Ratio
TO²	0.45	0.46	0.42	0.35	0.36

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Invested capital. See details »

² 2023 Calculation
TO = Sales ÷ Invested capital
= 32,854 ÷ 73,409 = 0.45

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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.	Linde plc TO improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.

Linde plc, CTR calculation

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)¹	6,386)	3,833)	3,800)	2,699)	2,416)
Add: Cash operating taxes²	1,947)	1,835)	1,537)	1,245)	1,086)
Net operating profit before taxes (NOPBT)	8,332)	5,669)	5,337)	3,944)	3,502)
Tax Rate
CTR³	23.36%	32.37%	28.80%	31.56%	31.01%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ NOPAT. See details »

² Cash operating taxes. See details »

³ 2023 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 1,947 ÷ 8,332 = 23.36%

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Tax rate	Description	The company
CTR	Effective cash tax rate on operating income.	Linde plc CTR increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Linde plc (NASDAQ:LIN)

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)