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)
Philip Morris International Inc., ROIC calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | 9,635) | 10,188) | 8,950) | 8,323) | 8,723) | |
| Invested capital2 | 47,466) | 29,268) | 31,958) | 31,284) | 30,915) | |
| Performance Ratio | ||||||
| ROIC3 | 20.30% | 34.81% | 28.01% | 26.60% | 28.22% | |
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| Altria Group Inc. | 19.97% | 6.66% | 12.64% | -1.13% | — | |
| Coca-Cola Co. | 12.66% | 13.95% | 11.43% | 11.99% | — | |
| Mondelēz International Inc. | 4.72% | 7.69% | 6.29% | 6.06% | — | |
| PepsiCo Inc. | 13.48% | 13.79% | 12.03% | 14.37% | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 NOPAT. See details »
2 Invested capital. See details »
3 2022 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 9,635 ÷ 47,466 = 20.30%
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. | Philip Morris International Inc. ROIC improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
Decomposition of ROIC
Philip Morris International Inc., decomposition of ROIC
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
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 decrease in return on invested capital (ROIC) over 2022 year is the decrease in efficiency measured by turnover of capital (TO) ratio.
Operating Profit Margin (OPM)
Philip Morris International Inc., OPM calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | 9,635) | 10,188) | 8,950) | 8,323) | 8,723) | |
| Add: Cash operating taxes2 | 2,606) | 2,825) | 2,656) | 2,561) | 2,689) | |
| Net operating profit before taxes (NOPBT) | 12,241) | 13,013) | 11,606) | 10,884) | 11,412) | |
| Revenues including excise taxes | 80,669) | 82,223) | 76,047) | 77,921) | 79,823) | |
| Profitability Ratio | ||||||
| OPM3 | 15.17% | 15.83% | 15.26% | 13.97% | 14.30% | |
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| Altria Group Inc. | 34.06% | 19.17% | 30.97% | 7.75% | — | |
| Coca-Cola Co. | 29.15% | 33.91% | 32.86% | 29.41% | — | |
| Mondelēz International Inc. | 12.76% | 20.19% | 19.73% | 16.67% | — | |
| PepsiCo Inc. | 13.92% | 14.80% | 14.87% | 15.55% | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2022 Calculation
OPM = 100 × NOPBT ÷ Revenues including excise taxes
= 100 × 12,241 ÷ 80,669 = 15.17%
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. | Philip Morris International Inc. OPM improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
Turnover of Capital (TO)
Philip Morris International Inc., TO calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues including excise taxes | 80,669) | 82,223) | 76,047) | 77,921) | 79,823) | |
| Invested capital1 | 47,466) | 29,268) | 31,958) | 31,284) | 30,915) | |
| Efficiency Ratio | ||||||
| TO2 | 1.70 | 2.81 | 2.38 | 2.49 | 2.58 | |
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| Altria Group Inc. | 0.87 | 0.78 | 0.63 | 0.59 | — | |
| Coca-Cola Co. | 0.54 | 0.48 | 0.44 | 0.51 | — | |
| Mondelēz International Inc. | 0.49 | 0.47 | 0.43 | 0.44 | — | |
| PepsiCo Inc. | 1.24 | 1.14 | 1.00 | 1.13 | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Invested capital. See details »
2 2022 Calculation
TO = Revenues including excise taxes ÷ Invested capital
= 80,669 ÷ 47,466 = 1.70
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. | Philip Morris International Inc. TO improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
Effective Cash Tax Rate (CTR)
Philip Morris International Inc., CTR calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | 9,635) | 10,188) | 8,950) | 8,323) | 8,723) | |
| Add: Cash operating taxes2 | 2,606) | 2,825) | 2,656) | 2,561) | 2,689) | |
| Net operating profit before taxes (NOPBT) | 12,241) | 13,013) | 11,606) | 10,884) | 11,412) | |
| Tax Rate | ||||||
| CTR3 | 21.29% | 21.71% | 22.89% | 23.53% | 23.56% | |
| Benchmarks | ||||||
| CTR, Competitors4 | ||||||
| Altria Group Inc. | 32.69% | 55.22% | 35.24% | 124.76% | — | |
| Coca-Cola Co. | 19.26% | 14.55% | 20.29% | 19.32% | — | |
| Mondelēz International Inc. | 24.96% | 18.38% | 26.45% | 17.14% | — | |
| PepsiCo Inc. | 22.12% | 18.12% | 19.44% | 18.26% | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2022 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 2,606 ÷ 12,241 = 21.29%
4 Click competitor name to see calculations.
| Tax rate | Description | The company |
|---|---|---|
| CTR | Effective cash tax rate on operating income. | Philip Morris International Inc. CTR decreased from 2020 to 2021 and from 2021 to 2022. |