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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Occidental Petroleum Corp. pages available for free this week:
- Statement of Comprehensive Income
- Balance Sheet: Assets
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Sales (P/S) since 2005
- Analysis of Debt
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Return on Invested Capital (ROIC)
Occidental Petroleum Corp., ROIC calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| ROIC3 | ||||||
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 NOPAT. See details »
2 Invested capital. See details »
3 2024 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The analysis of the annual financial data reveals several notable trends regarding the company's profitability and capital efficiency over the five-year period.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT shows a significant improvement from a substantial loss of -14,889 million USD in 2020 to a positive figure of 4,213 million USD in 2021. This upward trend continued sharply in 2022, reaching a peak of 12,526 million USD. However, after 2022, NOPAT declined markedly to 5,524 million USD in 2023 and further decreased to 3,380 million USD in 2024. This pattern indicates a recovery phase followed by diminished profitability in the most recent years.
- Invested Capital
- The invested capital decreased gradually from 63,270 million USD in 2020 to a low of 56,295 million USD in 2022, suggesting a reduction or optimization of asset base or capital employed during this period. Subsequently, invested capital stabilized somewhat in 2023 at 56,860 million USD before rising significantly to 66,896 million USD in 2024. This increase after 2022 contrasts with the earlier declining trend and may reflect new investments or asset expansions.
- Return on Invested Capital (ROIC)
- The ROIC improved dramatically from a negative -23.53% in 2020 to a positive 7.26% in 2021, reflecting better operational performance and capital efficiency. It further increased substantially to 22.25% in 2022, consistent with the peak in NOPAT and reduced invested capital, indicating highly effective capital utilization that year. However, ROIC dropped to 9.72% in 2023 and declined further to 5.05% in 2024, signaling a reduction in profitability relative to invested capital despite the increase in invested capital in 2024.
Overall, the data depicts a recovery from poor financial performance in 2020 to a peak operational efficiency and profitability in 2022. However, the subsequent years show decreased profitability and returns despite an expansion in invested capital, which may indicate challenges in maintaining operational efficiency or market conditions affecting returns.
Decomposition of ROIC
Occidental Petroleum Corp., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2024 | = | × | × | ||||
| Dec 31, 2023 | = | × | × | ||||
| Dec 31, 2022 | = | × | × | ||||
| Dec 31, 2021 | = | × | × | ||||
| Dec 31, 2020 | = | × | × |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
- Operating Profit Margin (OPM)
- The operating profit margin shows a significant recovery from a negative value of -79.93% in 2020 to positive territory in subsequent years. It increased sharply to 20.91% in 2021 and further to 41.51% in 2022, indicating strong profitability improvements. However, after peaking in 2022, the margin declined to 26.23% in 2023 and further to 19.73% in 2024, suggesting reduced profit efficiency over the last two years but still remaining positive.
- Turnover of Capital (TO)
- This ratio displays a gradual improvement from 0.28 in 2020 to a peak of 0.65 in 2022, reflecting better utilization of capital to generate revenue. After 2022, there is a decline to 0.50 in 2023 and further down to 0.40 in 2024, indicating a decreasing efficiency in capital utilization in the most recent years.
- 1 – Effective Cash Tax Rate (CTR)
- The effective cash tax rate metric started at 100% in 2020, then decreased steadily to 77.64% in 2021 and rose slightly to 82.37% in 2022. Subsequently, it declined again to 74.54% in 2023 and further down to 64.12% in 2024. This trend suggests an overall reduction in the tax burden paid in cash over the period, which could improve cash flows.
- Return on Invested Capital (ROIC)
- The return on invested capital experienced a marked improvement from a negative -23.53% in 2020 to positive 7.26% in 2021, with a strong peak at 22.25% in 2022, indicating enhanced profitability relative to capital invested. Following this peak, ROIC declined to 9.72% in 2023 and 5.05% in 2024, implying diminishing returns on capital in recent years but still positive and above the initial values.
Operating Profit Margin (OPM)
Occidental Petroleum Corp., OPM calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Net sales | ||||||
| Profitability Ratio | ||||||
| OPM3 | ||||||
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2024 Calculation
OPM = 100 × NOPBT ÷ Net sales
= 100 × ÷ =
4 Click competitor name to see calculations.
- Net Operating Profit Before Taxes (NOPBT)
- The net operating profit before taxes displayed significant volatility over the observed period. Starting from a substantial negative value of -14,234 million USD in 2020, it shifted to a positive figure of 5,426 million USD in 2021, indicating a recovery or operational turnaround. The upward trend continued in 2022, reaching the highest value of 15,207 million USD. However, a decline followed in the subsequent years, with NOPBT decreasing to 7,411 million USD in 2023 and further down to 5,272 million USD in 2024. This trend suggests operational challenges or external factors impacting profitability after 2022.
- Net Sales
- Net sales exhibited a generally positive trend until 2022, rising from 17,809 million USD in 2020 to 25,956 million USD in 2021, and peaking at 36,634 million USD in 2022. Following this peak, net sales declined to 28,257 million USD in 2023 and continued downward to 26,725 million USD in 2024. The pattern indicates initial growth potentially driven by market conditions or increased demand, followed by a contraction in sales volume or pricing pressures in the later years.
- Operating Profit Margin (OPM)
- The operating profit margin mirrored the fluctuations seen in NOPBT and net sales. Starting at a sharp negative margin of -79.93% in 2020, the margin improved dramatically to 20.91% in 2021, reflecting enhanced operational efficiency or favorable cost control. The margin further increased to 41.51% in 2022, aligning with the peak in profitability. However, the margin contracted subsequently, standing at 26.23% in 2023 and decreasing again to 19.73% in 2024. This contraction signals diminishing profitability in relation to sales, possibly due to rising costs, declining sales prices, or other operational pressures.
Turnover of Capital (TO)
Occidental Petroleum Corp., TO calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Invested capital. See details »
2 2024 Calculation
TO = Net sales ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
The financial data indicates notable fluctuations in the company's net sales over the reported periods. Net sales exhibited a substantial increase from 17,809 million USD in 2020 to a peak of 36,634 million USD in 2022. However, this was followed by a decline in subsequent years, falling to 28,257 million USD in 2023 and further to 26,725 million USD in 2024. This pattern suggests a period of strong growth culminating in 2022, succeeded by a contraction in sales revenue.
Regarding invested capital, the values show a decreasing trend from 63,270 million USD in 2020 to a low of 56,295 million USD in 2022. After this trough, the invested capital slightly increased to 56,860 million USD in 2023 and then rose significantly to 66,896 million USD in 2024. The initial decline and subsequent rise imply adjustments in capital allocation, possibly reflecting strategic reinvestment or expansion initiatives in the later years.
The turnover of capital ratio, which measures efficiency in using invested capital to generate sales, aligns with the trends observed in sales and invested capital. It improved considerably from 0.28 in 2020 to a high of 0.65 in 2022, indicating enhanced capital utilization efficiency during that period. Following 2022, the ratio declined to 0.5 in 2023 and 0.4 in 2024, signaling a decrease in efficiency possibly due to the rise in invested capital not being matched by proportional sales growth.
- Summary of key trends:
- - Net sales peaked in 2022 before declining in the two subsequent years.
- - Invested capital decreased until 2022, then increased notably by 2024.
- - Turnover of capital ratio improved through 2022, indicating better capital efficiency, but declined afterward.
- - The decline in sales combined with increased capital investment in later years suggests a need to monitor capital allocation effectiveness and sales performance closely.
Effective Cash Tax Rate (CTR)
Occidental Petroleum Corp., CTR calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Tax Rate | ||||||
| CTR3 | ||||||
| Benchmarks | ||||||
| CTR, Competitors4 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2024 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × ÷ =
4 Click competitor name to see calculations.
- Cash Operating Taxes
- The amount of cash operating taxes showed a significant increase from 655 million US dollars in 2020 to 2681 million in 2022. Subsequently, there was a decrease to 1887 million in 2023, followed by a slight increase to 1892 million in 2024. This pattern suggests a peak in tax payments in 2022, with a partial reduction thereafter.
- Net Operating Profit Before Taxes (NOPBT)
- NOPBT exhibited substantial volatility over the period. It began with a large negative value of -14,234 million US dollars in 2020, indicating an operating loss before taxes. There was a strong recovery to 5,426 million in 2021, followed by further growth to 15,207 million in 2022. However, after this peak, NOPBT declined to 7,411 million in 2023 and decreased further to 5,272 million in 2024. Despite the decline from 2022, NOPBT remained positive in the last three years.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate data is not available for 2020. For the years following, the rate was 22.36% in 2021, decreased to 17.63% in 2022, then increased notably to 25.46% in 2023, and further to 35.88% in 2024. This indicates a downward trend in the tax rate during 2022 followed by a continuous upward trend, reaching the highest tax rate in 2024.
- Overall Financial Trends
- The company experienced a severe operating loss in 2020 but recovered strongly in 2021 and reached the highest operating profits in 2022. Following this peak, a decline was observed in NOPBT over the next two years. Cash operating taxes correspondingly rose sharply until 2022, then diminished somewhat despite the profit decrease, possibly reflecting changes in tax strategies or rates. The effective cash tax rate shows increased taxation pressure from 2023 onwards. These trends suggest a volatile but improving operating performance in the early years, with increasing tax obligations impacting net outcomes in the latest periods.