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.
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Nike Inc. pages available for free this week:
- Income Statement
- Statement of Comprehensive Income
- Balance Sheet: Assets
- Analysis of Profitability Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Dividend Discount Model (DDM)
- Net Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Price to Sales (P/S) since 2005
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Return on Invested Capital (ROIC)
Nike Inc., ROIC calculation
Based on: 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31).
1 NOPAT. See details »
2 Invested capital. See details »
3 2022 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × ÷ =
| Performance ratio | Description | The company |
|---|---|---|
| ROIC | A measure of the periodic, after tax, cash-on-cash yield earned in the business. | Nike Inc. ROIC improved from 2020 to 2021 and from 2021 to 2022. |
Decomposition of ROIC
Nike Inc., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| May 31, 2022 | = | × | × | ||||
| May 31, 2021 | = | × | × | ||||
| May 31, 2020 | = | × | × | ||||
| May 31, 2019 | = | × | × | ||||
| May 31, 2018 | = | × | × | ||||
| May 31, 2017 | = | × | × |
Based on: 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31).
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 2022 year is the increase in efficiency measured by turnover of capital (TO) ratio.
Operating Profit Margin (OPM)
Nike Inc., OPM calculation
Based on: 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2022 Calculation
OPM = 100 × NOPBT ÷ Revenues
= 100 × ÷ =
| Profitability ratio | Description | The company |
|---|---|---|
| OPM | The operating profit margin (OPM) is the ratio of pretax economic earnings, or NOPBT, to sales. | Nike Inc. OPM improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022. |
Turnover of Capital (TO)
Nike Inc., TO calculation
| May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | May 31, 2018 | May 31, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Revenues | |||||||
| Invested capital1 | |||||||
| Efficiency Ratio | |||||||
| TO2 | |||||||
Based on: 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31).
1 Invested capital. See details »
2 2022 Calculation
TO = Revenues ÷ Invested capital
= ÷ =
| 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. | Nike Inc. TO improved from 2020 to 2021 and from 2021 to 2022. |
Effective Cash Tax Rate (CTR)
Nike Inc., CTR calculation
Based on: 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2022 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × ÷ =
| Tax rate | Description | The company |
|---|---|---|
| CTR | Effective cash tax rate on operating income. | Nike Inc. CTR decreased from 2020 to 2021 and from 2021 to 2022. |