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Lowe’s Cos. Inc. (LOW)
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)
Lowe’s Cos. Inc., ROIC calculation
| Feb 1, 2019 | Feb 2, 2018 | Feb 3, 2017 | Jan 29, 2016 | Jan 30, 2015 | Jan 31, 2014 | ||
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| Selected Financial Data (USD $ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | |
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| Invested capital2 | |
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| ROIC3 | |
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Based on: 10-K (filing date: 2019-04-02), 10-K (filing date: 2018-04-02), 10-K (filing date: 2017-04-04), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-03-31).
2019 Calculations
1 NOPAT. See Details »
2 Invested capital. See Details »
3 ROIC = 100 × NOPAT ÷ Invested capital
= 100 × ÷ =
| Ratio | Description | The company |
|---|---|---|
| ROIC | A measure of the periodic, after tax, cash-on-cash yield earned in the business. | Lowe’s Cos. Inc.’s ROIC improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |