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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

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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%

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%

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.