Return on Capital (ROC)
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)
Medtronic PLC, ROIC calculation, comparison to benchmarks
| Apr 24, 2026 | Apr 25, 2025 | Apr 26, 2024 | Apr 28, 2023 | Apr 29, 2022 | Apr 30, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | 5,540) | 4,980) | 3,736) | 4,151) | 4,888) | 4,049) | |
| Invested capital2 | 71,088) | 70,365) | 68,670) | 70,505) | 69,629) | 72,405) | |
| Performance Ratio | |||||||
| ROIC3 | 7.79% | 7.08% | 5.44% | 5.89% | 7.02% | 5.59% | |
| Benchmarks | |||||||
| ROIC, Competitors4 | |||||||
| Abbott Laboratories | — | 11.39% | 9.22% | 8.87% | 10.96% | 11.30% | |
| Elevance Health Inc. | — | 8.23% | 8.97% | 9.21% | 10.24% | 11.26% | |
| Intuitive Surgical Inc. | — | 26.17% | 28.75% | 22.30% | 22.01% | 37.63% | |
| UnitedHealth Group Inc. | — | 7.90% | 9.54% | 14.59% | 13.68% | 13.51% | |
Based on: 10-K (reporting date: 2026-04-24), 10-K (reporting date: 2025-04-25), 10-K (reporting date: 2024-04-26), 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30).
1 NOPAT. See details »
2 Invested capital. See details »
3 2026 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 5,540 ÷ 71,088 = 7.79%
4 Click competitor name to see calculations.
The analysis of return on invested capital (ROIC) reveals a period of volatility followed by a sustained recovery and expansion. Between April 2021 and April 2026, the ROIC exhibited a fluctuating pattern, reaching a low of 5.44% in 2024 before ascending to a peak of 7.79% by 2026.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT demonstrated significant variance over the six-year period. After an initial increase to US$ 4,888 million in 2022, the figure declined for two consecutive years, reaching a minimum of US$ 3,736 million in 2024. A strong recovery occurred in 2025 and 2026, with the latter year reaching US$ 5,540 million, marking the highest operational profit within the observed timeframe.
- Invested Capital Stability
- The capital base remained relatively stable, fluctuating within a narrow range between US$ 68,670 million and US$ 72,405 million. A gradual decline was observed from 2021 through 2024, followed by a moderate increase to US$ 71,088 million by 2026. The stability of the invested capital suggests that the fluctuations in return metrics were not the result of significant structural changes in the asset base or large-scale divestitures.
- ROIC Correlation and Performance
- The fluctuations in ROIC are primarily driven by the volatility of NOPAT rather than changes in the invested capital. The contraction in ROIC to 5.44% in 2024 aligns directly with the trough in operating profit. Conversely, the expansion to 7.79% in 2026 indicates an improvement in operational efficiency, as the growth in NOPAT significantly outpaced the marginal increase in invested capital during the final two years of the period.
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Decomposition of ROIC
Medtronic PLC, decomposition of ROIC
Based on: 10-K (reporting date: 2026-04-24), 10-K (reporting date: 2025-04-25), 10-K (reporting date: 2024-04-26), 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30).
1 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
The Return on Invested Capital (ROIC) exhibits a fluctuating trend over the analyzed period, characterized by an initial increase, a mid-period decline, and a subsequent recovery toward a peak of 7.79% by April 2026. This trajectory is the result of the interaction between operating efficiency, asset utilization, and tax effects.
- Operating Profit Margin (OPM)
- Operating margins demonstrated volatility with a general range between 16.48% and 19.63%. A peak was reached in April 2023 at 19.63%, followed by a notable contraction to 17.14% in April 2024. However, margins recovered and stabilized at approximately 19.1% through 2025 and 2026, suggesting a return to normalized operating profitability.
- Turnover of Capital (TO)
- A consistent upward trend in capital turnover is observed, rising from 0.42 in 2021 to 0.51 by 2026. This steady improvement indicates an increase in the efficiency of the company in generating revenue from its invested capital base, serving as a positive driver for the overall return profile.
- Effective Cash Tax Impact (1 – CTR)
- The after-tax multiplier experienced significant variance, which heavily influenced the final ROIC. After remaining stable around 80-81% in 2021 and 2022, there was a sharp decline to 67.72% in 2023 and 67.25% in 2024. This reduction in the after-tax retention rate acted as a primary drag on returns during those years before recovering to 79.51% by 2026.
- ROIC Decomposition and Synthesis
- The decline in ROIC from 7.02% in 2022 to 5.44% in 2024 occurred despite the peak in operating margins in 2023, indicating that the negative impact of the effective cash tax rate outweighed operational gains during that window. The subsequent climb to 7.79% by 2026 is driven by the convergence of three factors: the stabilization of operating margins, the continuous improvement in capital turnover, and the recovery of the after-tax multiplier.
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Operating Profit Margin (OPM)
Medtronic PLC, OPM calculation, comparison to benchmarks
| Apr 24, 2026 | Apr 25, 2025 | Apr 26, 2024 | Apr 28, 2023 | Apr 29, 2022 | Apr 30, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | 5,540) | 4,980) | 3,736) | 4,151) | 4,888) | 4,049) | |
| Add: Cash operating taxes2 | 1,428) | 1,436) | 1,820) | 1,979) | 1,186) | 925) | |
| Net operating profit before taxes (NOPBT) | 6,968) | 6,416) | 5,556) | 6,130) | 6,074) | 4,974) | |
| Net sales | 36,364) | 33,537) | 32,364) | 31,227) | 31,686) | 30,117) | |
| Add: Increase (decrease) in deferred revenue | 54) | (7) | 48) | 6) | 31) | 65) | |
| Adjusted net sales | 36,418) | 33,530) | 32,412) | 31,233) | 31,717) | 30,182) | |
| Profitability Ratio | |||||||
| OPM3 | 19.13% | 19.14% | 17.14% | 19.63% | 19.15% | 16.48% | |
| Benchmarks | |||||||
| OPM, Competitors4 | |||||||
| Abbott Laboratories | — | 19.53% | 17.09% | 16.84% | 20.24% | 20.37% | |
| Elevance Health Inc. | — | 4.19% | 5.46% | 5.32% | 5.64% | 6.58% | |
| Intuitive Surgical Inc. | — | 33.47% | 32.39% | 28.14% | 26.19% | 33.56% | |
| UnitedHealth Group Inc. | — | 4.54% | 6.31% | 9.14% | 9.13% | 8.33% | |
Based on: 10-K (reporting date: 2026-04-24), 10-K (reporting date: 2025-04-25), 10-K (reporting date: 2024-04-26), 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2026 Calculation
OPM = 100 × NOPBT ÷ Adjusted net sales
= 100 × 6,968 ÷ 36,418 = 19.13%
4 Click competitor name to see calculations.
Analysis of the operating performance reveals a general trajectory of expansion in both revenue and absolute operating profit over the observed six-year period. Adjusted net sales grew from 30,182 million US dollars in 2021 to 36,418 million US dollars by 2026, demonstrating a consistent long-term increase in top-line growth.
- Operating Profit Margin (OPM) Dynamics
- The operating profit margin showed an initial upward trend, rising from 16.48% in 2021 to a peak of 19.63% in 2023. A significant contraction was observed in 2024, where the margin dropped to 17.14%. However, profitability recovered in 2025 and 2026, stabilizing at approximately 19.1%.
- Net Operating Profit Before Taxes (NOPBT) Trends
- NOPBT increased from 4,974 million US dollars in 2021 to 6,968 million US dollars in 2026. While growth was steady through 2023, a decline occurred in 2024, where profit fell to 5,556 million US dollars. This decline occurred despite an increase in adjusted net sales during that same period, which directly resulted in the corresponding dip in the operating profit margin.
- Correlation Between Sales and Efficiency
- The relationship between adjusted net sales and NOPBT indicates that while revenue has scaled, the efficiency of converting sales into operating profit has experienced volatility. The stabilization of the OPM at 19.13% and 19.14% in the final two years suggests a return to a consistent operational efficiency level as net sales approached 36,418 million US dollars.
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Turnover of Capital (TO)
Medtronic PLC, TO calculation, comparison to benchmarks
| Apr 24, 2026 | Apr 25, 2025 | Apr 26, 2024 | Apr 28, 2023 | Apr 29, 2022 | Apr 30, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net sales | 36,364) | 33,537) | 32,364) | 31,227) | 31,686) | 30,117) | |
| Add: Increase (decrease) in deferred revenue | 54) | (7) | 48) | 6) | 31) | 65) | |
| Adjusted net sales | 36,418) | 33,530) | 32,412) | 31,233) | 31,717) | 30,182) | |
| Invested capital1 | 71,088) | 70,365) | 68,670) | 70,505) | 69,629) | 72,405) | |
| Efficiency Ratio | |||||||
| TO2 | 0.51 | 0.48 | 0.47 | 0.44 | 0.46 | 0.42 | |
| Benchmarks | |||||||
| TO, Competitors3 | |||||||
| Abbott Laboratories | — | 0.71 | 0.70 | 0.67 | 0.71 | 0.69 | |
| Elevance Health Inc. | — | 2.44 | 2.24 | 2.44 | 2.33 | 2.14 | |
| Intuitive Surgical Inc. | — | 0.89 | 1.07 | 1.00 | 1.16 | 1.27 | |
| UnitedHealth Group Inc. | — | 2.25 | 1.99 | 2.01 | 1.95 | 2.04 | |
Based on: 10-K (reporting date: 2026-04-24), 10-K (reporting date: 2025-04-25), 10-K (reporting date: 2024-04-26), 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30).
1 Invested capital. See details »
2 2026 Calculation
TO = Adjusted net sales ÷ Invested capital
= 36,418 ÷ 71,088 = 0.51
3 Click competitor name to see calculations.
The analysis of capital efficiency from April 2021 to April 2026 reveals a consistent improvement in the ability to generate revenue from invested assets. The turnover of capital ratio increased from 0.42 to 0.51 over the observed period, signaling an upward trend in operational efficiency.
- Adjusted Net Sales Performance
- Adjusted net sales exhibited a general growth trajectory, increasing from US$ 30,182 million in 2021 to US$ 36,418 million by 2026. While a slight contraction occurred in 2023, the subsequent years showed accelerated growth, particularly between 2025 and 2026, where sales rose by approximately US$ 2.9 billion.
- Invested Capital Management
- Invested capital remained relatively stable, fluctuating within a narrow range between a high of US$ 72,405 million in 2021 and a low of US$ 68,670 million in 2024. The stability of the capital base indicates that the expansion in sales was not dependent on significant new capital injections.
- Turnover of Capital Efficiency
- The turnover ratio progressed from 0.42 to 0.51, reflecting a more efficient utilization of resources. The growth in the ratio is primarily attributed to the divergence between rising adjusted net sales and a stagnant invested capital base. This suggests a successful optimization of existing assets to drive higher top-line results.
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Effective Cash Tax Rate (CTR)
Medtronic PLC, CTR calculation, comparison to benchmarks
| Apr 24, 2026 | Apr 25, 2025 | Apr 26, 2024 | Apr 28, 2023 | Apr 29, 2022 | Apr 30, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | 5,540) | 4,980) | 3,736) | 4,151) | 4,888) | 4,049) | |
| Add: Cash operating taxes2 | 1,428) | 1,436) | 1,820) | 1,979) | 1,186) | 925) | |
| Net operating profit before taxes (NOPBT) | 6,968) | 6,416) | 5,556) | 6,130) | 6,074) | 4,974) | |
| Tax Rate | |||||||
| CTR3 | 20.49% | 22.38% | 32.75% | 32.28% | 19.53% | 18.59% | |
| Benchmarks | |||||||
| CTR, Competitors4 | |||||||
| Abbott Laboratories | — | 17.90% | 22.68% | 21.67% | 23.97% | 20.05% | |
| Elevance Health Inc. | — | 19.66% | 26.66% | 29.13% | 22.01% | 20.22% | |
| Intuitive Surgical Inc. | — | 12.30% | 17.42% | 20.94% | 27.40% | 11.76% | |
| UnitedHealth Group Inc. | — | 22.49% | 24.04% | 20.64% | 23.25% | 20.32% | |
Based on: 10-K (reporting date: 2026-04-24), 10-K (reporting date: 2025-04-25), 10-K (reporting date: 2024-04-26), 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2026 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 1,428 ÷ 6,968 = 20.49%
4 Click competitor name to see calculations.
The analysis of the effective cash tax rate (CTR) reveals a period of significant volatility between 2021 and 2026, characterized by a sharp mid-period spike followed by a return toward historical norms. While net operating profit before taxes (NOPBT) generally trended upward over the six-year period, the cash tax burden did not move in a linear correlation with profitability.
- Effective Cash Tax Rate (CTR) Trends
- The CTR remained relatively stable and low during the 2021 and 2022 fiscal years, hovering around 18.59% and 19.53%, respectively. A substantial increase occurred in 2023, with the rate jumping to 32.28%, and peaking at 32.75% in 2024. This period represents a significant escalation in the cash tax burden relative to operating profits. Subsequently, the rate declined sharply to 22.38% in 2025 and further to 20.49% in 2026, suggesting a normalization of tax obligations.
- Cash Operating Taxes and Profitability Correlation
- Cash operating taxes increased from 925 million in 2021 to a peak of 1,979 million in 2023. Notably, in 2024, cash taxes remained high at 1,820 million despite a contraction in NOPBT to 5,556 million, which contributed to the peak CTR of 32.75%. In the final two years of the period, cash taxes decreased to approximately 1.4 billion, even as NOPBT climbed to its highest level of 6,968 million in 2026. This divergence indicates an improvement in tax efficiency toward the end of the analyzed timeframe.
- NOPBT Growth Patterns
- Operating profitability demonstrated a general growth trajectory, rising from 4,974 million in 2021 to 6,968 million by 2026. The only exception to this growth was a dip in 2024, where profit fell to 5,556 million. The recovery in 2025 and 2026 coincided with the reduction in the effective cash tax rate, enhancing the overall return on capital by reducing the cash outflow for taxes during a period of peak operating performance.
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