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)
Monsanto Co., ROIC calculation, comparison to benchmarks
| Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | Aug 31, 2013 | Aug 31, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | 2,582) | 1,816) | 2,361) | 2,633) | 2,743) | 2,247) | |
| Invested capital2 | 16,366) | 15,963) | 18,327) | 16,260) | 15,770) | 14,553) | |
| Performance Ratio | |||||||
| ROIC3 | 15.78% | 11.38% | 12.88% | 16.19% | 17.39% | 15.44% | |
| Benchmarks | |||||||
| ROIC, Competitors4 | |||||||
| Deckers Outdoor Corp. | — | — | — | — | — | — | |
| lululemon athletica inc. | — | — | — | — | — | — | |
| Nike Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31).
1 NOPAT. See details »
2 Invested capital. See details »
3 2017 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 2,582 ÷ 16,366 = 15.78%
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. | Monsanto Co. ROIC deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
Decomposition of ROIC
Monsanto Co., decomposition of ROIC
Based on: 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31).
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 2017 year is the increase in profitability measured by operating profit margin (OPM) ratio.
Operating Profit Margin (OPM)
Monsanto Co., OPM calculation, comparison to benchmarks
| Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | Aug 31, 2013 | Aug 31, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | 2,582) | 1,816) | 2,361) | 2,633) | 2,743) | 2,247) | |
| Add: Cash operating taxes2 | 719) | 801) | 1,272) | 1,179) | 821) | 708) | |
| Net operating profit before taxes (NOPBT) | 3,301) | 2,617) | 3,632) | 3,812) | 3,564) | 2,954) | |
| Net sales | 14,640) | 13,502) | 15,001) | 15,855) | 14,861) | 13,504) | |
| Add: Increase (decrease) in deferred revenues | 238) | 186) | (68) | (170) | 14) | (69) | |
| Adjusted net sales | 14,878) | 13,688) | 14,933) | 15,685) | 14,875) | 13,435) | |
| Profitability Ratio | |||||||
| OPM3 | 22.19% | 19.12% | 24.33% | 24.30% | 23.96% | 21.99% | |
| Benchmarks | |||||||
| OPM, Competitors4 | |||||||
| Deckers Outdoor Corp. | — | — | — | — | — | — | |
| lululemon athletica inc. | — | — | — | — | — | — | |
| Nike Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2017 Calculation
OPM = 100 × NOPBT ÷ Adjusted net sales
= 100 × 3,301 ÷ 14,878 = 22.19%
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. | Monsanto Co. OPM deteriorated from 2015 to 2016 but then improved from 2016 to 2017 not reaching 2015 level. |
Turnover of Capital (TO)
Monsanto Co., TO calculation, comparison to benchmarks
| Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | Aug 31, 2013 | Aug 31, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net sales | 14,640) | 13,502) | 15,001) | 15,855) | 14,861) | 13,504) | |
| Add: Increase (decrease) in deferred revenues | 238) | 186) | (68) | (170) | 14) | (69) | |
| Adjusted net sales | 14,878) | 13,688) | 14,933) | 15,685) | 14,875) | 13,435) | |
| Invested capital1 | 16,366) | 15,963) | 18,327) | 16,260) | 15,770) | 14,553) | |
| Efficiency Ratio | |||||||
| TO2 | 0.91 | 0.86 | 0.81 | 0.96 | 0.94 | 0.92 | |
| Benchmarks | |||||||
| TO, Competitors3 | |||||||
| Deckers Outdoor Corp. | — | — | — | — | — | — | |
| lululemon athletica inc. | — | — | — | — | — | — | |
| Nike Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31).
1 Invested capital. See details »
2 2017 Calculation
TO = Adjusted net sales ÷ Invested capital
= 14,878 ÷ 16,366 = 0.91
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. | Monsanto Co. TO improved from 2015 to 2016 and from 2016 to 2017. |
Effective Cash Tax Rate (CTR)
Monsanto Co., CTR calculation, comparison to benchmarks
| Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | Aug 31, 2013 | Aug 31, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | 2,582) | 1,816) | 2,361) | 2,633) | 2,743) | 2,247) | |
| Add: Cash operating taxes2 | 719) | 801) | 1,272) | 1,179) | 821) | 708) | |
| Net operating profit before taxes (NOPBT) | 3,301) | 2,617) | 3,632) | 3,812) | 3,564) | 2,954) | |
| Tax Rate | |||||||
| CTR3 | 21.78% | 30.60% | 35.00% | 30.93% | 23.03% | 23.95% | |
| Benchmarks | |||||||
| CTR, Competitors4 | |||||||
| Deckers Outdoor Corp. | — | — | — | — | — | — | |
| lululemon athletica inc. | — | — | — | — | — | — | |
| Nike Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2017 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 719 ÷ 3,301 = 21.78%
4 Click competitor name to see calculations.
| Tax rate | Description | The company |
|---|---|---|
| CTR | Effective cash tax rate on operating income. | Monsanto Co. CTR decreased from 2015 to 2016 and from 2016 to 2017. |