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)
Oracle Corp., ROIC calculation, comparison to benchmarks
| May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | May 31, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | 10,160) | 7,492) | 14,348) | 10,144) | 10,943) | 4,255) | |
| Invested capital2 | 98,251) | 77,262) | 81,745) | 87,978) | 72,089) | 72,343) | |
| Performance Ratio | |||||||
| ROIC3 | 10.34% | 9.70% | 17.55% | 11.53% | 15.18% | 5.88% | |
| Benchmarks | |||||||
| ROIC, Competitors4 | |||||||
| Accenture PLC | 21.14% | 23.93% | 25.83% | 26.30% | 24.83% | 25.00% | |
| Adobe Inc. | 21.68% | 26.93% | 29.44% | 21.67% | 19.74% | 17.25% | |
| International Business Machines Corp. | 7.63% | -0.68% | 3.78% | 3.44% | 7.64% | — | |
| Intuit Inc. | 8.53% | 9.30% | 17.64% | 20.65% | 34.71% | 32.34% | |
| Microsoft Corp. | 28.71% | 36.59% | 45.56% | 43.43% | 38.28% | 19.75% | |
| Palo Alto Networks Inc. | 28.59% | 19.73% | 11.48% | 9.91% | 13.83% | 10.72% | |
| Salesforce Inc. | 3.00% | 5.42% | 8.23% | 5.09% | 8.97% | — | |
| ServiceNow Inc. | 22.31% | 17.69% | 18.88% | 20.49% | 19.87% | — | |
| Synopsys Inc. | 11.03% | 17.54% | 11.52% | 11.63% | 8.35% | 6.37% | |
Based on: 10-K (reporting date: 2023-05-31), 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).
1 NOPAT. See details »
2 Invested capital. See details »
3 2023 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 10,160 ÷ 98,251 = 10.34%
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. | Oracle Corp. ROIC deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
Decomposition of ROIC
Oracle Corp., decomposition of ROIC
Based on: 10-K (reporting date: 2023-05-31), 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).
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 2023 year is the increase in profitability measured by operating profit margin (OPM) ratio.
Operating Profit Margin (OPM)
Oracle Corp., OPM calculation, comparison to benchmarks
| May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | May 31, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | 10,160) | 7,492) | 14,348) | 10,144) | 10,943) | 4,255) | |
| Add: Cash operating taxes2 | 3,507) | 2,659) | 2,197) | 3,101) | 2,600) | 9,932) | |
| Net operating profit before taxes (NOPBT) | 13,667) | 10,151) | 16,545) | 13,245) | 13,542) | 14,187) | |
| Revenues | 49,954) | 42,440) | 40,479) | 39,068) | 39,506) | 39,831) | |
| Add: Increase (decrease) in deferred revenues | 828) | (344) | 855) | (444) | 77) | 219) | |
| Adjusted revenues | 50,782) | 42,096) | 41,334) | 38,624) | 39,583) | 40,050) | |
| Profitability Ratio | |||||||
| OPM3 | 26.91% | 24.11% | 40.03% | 34.29% | 34.21% | 35.42% | |
| Benchmarks | |||||||
| OPM, Competitors4 | |||||||
| Accenture PLC | 14.56% | 15.48% | 16.65% | 16.59% | 14.89% | 14.07% | |
| Adobe Inc. | 35.97% | 36.56% | 40.89% | 34.42% | 31.93% | 35.32% | |
| International Business Machines Corp. | 17.57% | 2.98% | 10.91% | 9.64% | 15.99% | — | |
| Intuit Inc. | 23.08% | 21.00% | 28.02% | 29.42% | 28.33% | 25.71% | |
| Microsoft Corp. | 43.20% | 43.28% | 43.49% | 38.29% | 36.61% | 35.11% | |
| Palo Alto Networks Inc. | 29.22% | 23.90% | 16.95% | 17.41% | 16.22% | 16.97% | |
| Salesforce Inc. | 10.25% | 16.40% | 20.24% | 15.63% | 19.12% | — | |
| ServiceNow Inc. | 18.76% | 14.87% | 17.20% | 17.77% | 14.93% | — | |
| Synopsys Inc. | 20.63% | 27.91% | 22.47% | 22.28% | 17.29% | 15.30% | |
Based on: 10-K (reporting date: 2023-05-31), 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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2023 Calculation
OPM = 100 × NOPBT ÷ Adjusted revenues
= 100 × 13,667 ÷ 50,782 = 26.91%
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. | Oracle Corp. OPM deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
Turnover of Capital (TO)
Oracle Corp., TO calculation, comparison to benchmarks
| May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | May 31, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Revenues | 49,954) | 42,440) | 40,479) | 39,068) | 39,506) | 39,831) | |
| Add: Increase (decrease) in deferred revenues | 828) | (344) | 855) | (444) | 77) | 219) | |
| Adjusted revenues | 50,782) | 42,096) | 41,334) | 38,624) | 39,583) | 40,050) | |
| Invested capital1 | 98,251) | 77,262) | 81,745) | 87,978) | 72,089) | 72,343) | |
| Efficiency Ratio | |||||||
| TO2 | 0.52 | 0.54 | 0.51 | 0.44 | 0.55 | 0.55 | |
| Benchmarks | |||||||
| TO, Competitors3 | |||||||
| Accenture PLC | 1.94 | 2.08 | 1.95 | 1.97 | 2.16 | 2.38 | |
| Adobe Inc. | 0.80 | 0.86 | 0.80 | 0.70 | 0.67 | 0.61 | |
| International Business Machines Corp. | 0.56 | 0.58 | 0.52 | 0.58 | 0.59 | — | |
| Intuit Inc. | 0.61 | 0.52 | 0.79 | 0.89 | 1.50 | 1.50 | |
| Microsoft Corp. | 0.88 | 1.04 | 1.20 | 1.35 | 1.35 | 1.41 | |
| Palo Alto Networks Inc. | 1.01 | 0.86 | 0.74 | 0.62 | 0.90 | 0.67 | |
| Salesforce Inc. | 0.39 | 0.36 | 0.44 | 0.41 | 0.51 | — | |
| ServiceNow Inc. | 1.24 | 1.24 | 1.16 | 1.23 | 1.36 | — | |
| Synopsys Inc. | 0.71 | 0.71 | 0.63 | 0.58 | 0.58 | 0.59 | |
Based on: 10-K (reporting date: 2023-05-31), 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).
1 Invested capital. See details »
2 2023 Calculation
TO = Adjusted revenues ÷ Invested capital
= 50,782 ÷ 98,251 = 0.52
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. | Oracle Corp. TO improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level. |
Effective Cash Tax Rate (CTR)
Oracle Corp., CTR calculation, comparison to benchmarks
| May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | May 31, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | 10,160) | 7,492) | 14,348) | 10,144) | 10,943) | 4,255) | |
| Add: Cash operating taxes2 | 3,507) | 2,659) | 2,197) | 3,101) | 2,600) | 9,932) | |
| Net operating profit before taxes (NOPBT) | 13,667) | 10,151) | 16,545) | 13,245) | 13,542) | 14,187) | |
| Tax Rate | |||||||
| CTR3 | 25.66% | 26.20% | 13.28% | 23.42% | 19.20% | 70.01% | |
| Benchmarks | |||||||
| CTR, Competitors4 | |||||||
| Accenture PLC | 25.34% | 25.55% | 20.47% | 19.34% | 22.96% | 25.38% | |
| Adobe Inc. | 24.54% | 14.22% | 10.28% | 9.63% | 7.06% | 19.97% | |
| International Business Machines Corp. | 22.56% | 139.75% | 33.85% | 37.95% | 18.49% | — | |
| Intuit Inc. | 39.49% | 14.74% | 20.15% | 20.99% | 18.37% | 16.40% | |
| Microsoft Corp. | 24.32% | 18.98% | 13.05% | 15.80% | 22.65% | 60.11% | |
| Palo Alto Networks Inc. | 2.83% | 3.82% | 8.83% | 7.62% | 5.72% | 6.34% | |
| Salesforce Inc. | 25.51% | 8.31% | 6.79% | 19.81% | 7.62% | — | |
| ServiceNow Inc. | 4.32% | 4.41% | 5.03% | 5.90% | 2.51% | — | |
| Synopsys Inc. | 24.60% | 11.45% | 18.39% | 10.36% | 16.50% | 28.97% | |
Based on: 10-K (reporting date: 2023-05-31), 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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2023 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 3,507 ÷ 13,667 = 25.66%
4 Click competitor name to see calculations.
| Tax rate | Description | The company |
|---|---|---|
| CTR | Effective cash tax rate on operating income. | Oracle Corp. CTR increased from 2021 to 2022 but then slightly decreased from 2022 to 2023. |