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

Lockheed Martin Corp. (NYSE:LMT)

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)

Lockheed Martin Corp., ROIC calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 6,812  5,420  5,703  3,910  3,478 
Invested capital2 25,671  24,942  21,063  19,892  22,569 
Performance Ratio
ROIC3 26.53% 21.73% 27.07% 19.66% 15.41%
Benchmarks
ROIC, Competitors4
Boeing Co. -3.49% 31.51% 32.81% 17.51% 16.43%
General Dynamics Corp. 13.02% 12.30% 17.16% 18.24% 17.81%
Northrop Grumman Corp. 9.54% 16.34% 10.47% 14.58% 16.21%
Raytheon Technologies Corp. 6.88% 7.48% 7.61% 9.74% 9.41%

Based on: 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-24).

1 NOPAT. See details »

2 Invested capital. See details »

3 2019 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 6,812 ÷ 25,671 = 26.53%

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. Lockheed Martin Corp.’s ROIC deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.

Decomposition of ROIC

Lockheed Martin Corp., decomposition of ROIC

Microsoft Excel LibreOffice Calc
ROIC = OPM1 × TO2 × 1 – CTR3
Dec 31, 2019 26.53% = 12.87% × 2.33 × 88.51%
Dec 31, 2018 21.73% = 12.31% × 2.16 × 81.87%
Dec 31, 2017 27.07% = 11.35% × 2.42 × 98.44%
Dec 31, 2016 19.66% = 11.67% × 2.38 × 70.93%
Dec 31, 2015 15.41% = 11.95% × 2.04 × 63.10%

Based on: 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-24).

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 2019 year is the decrease in effective cash tax rate (CTR).

Operating Profit Margin (OPM)

Lockheed Martin Corp., OPM calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 6,812  5,420  5,703  3,910  3,478 
Add: Cash operating taxes2 885  1,200  90  1,602  2,034 
Net operating profit before taxes (NOPBT) 7,696  6,620  5,793  5,512  5,512 
 
Net sales 59,812  53,762  51,048  47,248  46,132 
Profitability Ratio
OPM3 12.87% 12.31% 11.35% 11.67% 11.95%
Benchmarks
OPM, Competitors4
Boeing Co. -1.80% 11.91% 10.98% 6.18% 7.75%
General Dynamics Corp. 12.32% 12.43% 13.58% 14.02% 13.49%
Northrop Grumman Corp. 9.26% 14.50% 13.43% 13.31% 13.24%
Raytheon Technologies Corp. 12.71% 14.73% 13.87% 13.87% 13.14%

Based on: 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-24).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2019 Calculation
OPM = 100 × NOPBT ÷ Net sales
= 100 × 7,696 ÷ 59,812 = 12.87%

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. Lockheed Martin Corp.’s OPM improved from 2017 to 2018 and from 2018 to 2019.

Turnover of Capital (TO)

Lockheed Martin Corp., TO calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Net sales 59,812  53,762  51,048  47,248  46,132 
Invested capital1 25,671  24,942  21,063  19,892  22,569 
Efficiency Ratio
TO2 2.33 2.16 2.42 2.38 2.04
Benchmarks
TO, Competitors3
Boeing Co. 2.15 3.25 3.54 3.79 3.11
General Dynamics Corp. 1.24 1.21 1.57 1.60 1.73
Northrop Grumman Corp. 1.44 1.25 0.94 1.45 1.43
Raytheon Technologies Corp. 0.74 0.65 0.85 0.89 0.94

Based on: 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-24).

1 Invested capital. See details »

2 2019 Calculation
TO = Net sales ÷ Invested capital
= 59,812 ÷ 25,671 = 2.33

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. Lockheed Martin Corp.’s TO deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.

Effective Cash Tax Rate (CTR)

Lockheed Martin Corp., CTR calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 6,812  5,420  5,703  3,910  3,478 
Add: Cash operating taxes2 885  1,200  90  1,602  2,034 
Net operating profit before taxes (NOPBT) 7,696  6,620  5,793  5,512  5,512 
Tax Rate
CTR3 11.49% 18.13% 1.56% 29.07% 36.90%
Benchmarks
CTR, Competitors4
Boeing Co. — 18.72% 15.55% 25.20% 31.78%
General Dynamics Corp. 15.11% 18.10% 19.29% 18.96% 23.72%
Northrop Grumman Corp. 28.44% 9.87% 17.23% 24.28% 14.38%
Raytheon Technologies Corp. 26.73% 21.73% 35.24% 20.82% 23.70%

Based on: 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-24).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2019 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 885 ÷ 7,696 = 11.49%

4 Click competitor name to see calculations.

Tax rate Description The company
CTR Effective cash tax rate on operating income. Lockheed Martin Corp.’s CTR increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.