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

Newmont Corp. (NYSE:NEM)

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)

Newmont Corp., ROIC calculation

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 3,486  592  882  (252) 872 
Invested capital2 28,943  13,941  13,887  13,932  17,055 
Performance Ratio
ROIC3 12.04% 4.24% 6.35% -1.81% 5.11%

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-17).

1 NOPAT. See details »

2 Invested capital. See details »

3 2019 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 3,486 ÷ 28,943 = 12.04%

Performance ratio Description The company
ROIC A measure of the periodic, after tax, cash-on-cash yield earned in the business. Newmont Corp.’s ROIC deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

Decomposition of ROIC

Newmont Corp., decomposition of ROIC

Microsoft Excel LibreOffice Calc
ROIC = OPM1 × TO2 × 1 – CTR3
Dec 31, 2019 12.04% = 41.44% × 0.34 × 86.37%
Dec 31, 2018 4.24% = 11.86% × 0.52 × 68.77%
Dec 31, 2017 6.35% = 17.49% × 0.53 × 68.63%
Dec 31, 2016 -1.81% = -0.99% × 0.48 × 100.00%
Dec 31, 2015 5.11% = 17.45% × 0.45 × 64.66%

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-17).

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 increase in profitability measured by operating profit margin (OPM) ratio.

Operating Profit Margin (OPM)

Newmont Corp., OPM calculation

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 3,486  592  882  (252) 872 
Add: Cash operating taxes2 550  269  403  185  477 
Net operating profit before taxes (NOPBT) 4,036  860  1,285  (66) 1,349 
 
Sales 9,740  7,253  7,348  6,711  7,729 
Profitability Ratio
OPM3 41.44% 11.86% 17.49% -0.99% 17.45%

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-17).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2019 Calculation
OPM = 100 × NOPBT ÷ Sales
= 100 × 4,036 ÷ 9,740 = 41.44%

Profitability ratio Description The company
OPM The operating profit margin (OPM) is the ratio of pretax economic earnings, or NOPBT, to sales. Newmont Corp.’s OPM deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

Turnover of Capital (TO)

Newmont Corp., TO calculation

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)
Sales 9,740  7,253  7,348  6,711  7,729 
Invested capital1 28,943  13,941  13,887  13,932  17,055 
Efficiency Ratio
TO2 0.34 0.52 0.53 0.48 0.45

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-17).

1 Invested capital. See details »

2 2019 Calculation
TO = Sales ÷ Invested capital
= 9,740 ÷ 28,943 = 0.34

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. Newmont Corp.’s TO deteriorated from 2017 to 2018 and from 2018 to 2019.

Effective Cash Tax Rate (CTR)

Newmont Corp., CTR calculation

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 3,486  592  882  (252) 872 
Add: Cash operating taxes2 550  269  403  185  477 
Net operating profit before taxes (NOPBT) 4,036  860  1,285  (66) 1,349 
Tax Rate
CTR3 13.63% 31.23% 31.37% — 35.34%

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-17).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2019 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 550 ÷ 4,036 = 13.63%

Tax rate Description The company
CTR Effective cash tax rate on operating income. Newmont Corp.’s CTR decreased from 2017 to 2018 and from 2018 to 2019.