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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- Balance Sheet: Assets
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value (EV)
- Current Ratio since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Revenues
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Return on Invested Capital (ROIC)
RTX 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 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin 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.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT showed a significant shift from a negative value of -1590 million US dollars in 2020 to positive figures in subsequent years. There was a substantial increase to 5054 million in 2021, followed by a slight decline over the next two years to 4663 million in 2022 and 4118 million in 2023. However, in 2024 there was a notable recovery, with NOPAT rising strongly to 6483 million US dollars. This indicates operational profitability improved markedly after 2020 and experienced some fluctuations before reaching a new high in 2024.
- Invested Capital
- The invested capital decreased consistently over the five-year period. Starting from 115,597 million US dollars in 2020, it dropped gradually each year to 114,687 million in 2021, 113,345 million in 2022, 112,037 million in 2023, and 111,328 million in 2024. This steady decline suggests a gradual reduction in the capital deployed in the business.
- Return on Invested Capital (ROIC)
- The ROIC shifted from a negative return of -1.38% in 2020 to positive returns starting in 2021. It increased sharply to 4.41% in 2021, before slightly declining to 4.11% in 2022 and further to 3.68% in 2023. In 2024, ROIC rose again markedly to 5.82%. The trend indicates improving efficiency in generating returns on the invested capital after the initial loss, with a peak performance observed at the end of the period.
- Summary
- The data shows a clear turnaround in profitability as evidenced by the transition of NOPAT from negative to positive. This improvement in operating profit aligns with a consistent increase in ROIC, reflecting enhanced return generation on a gradually decreasing invested capital base. Fluctuations in NOPAT and ROIC during 2022 and 2023 may suggest external or operational challenges during this period; however, the final year’s data indicates a strong recovery and improved capital efficiency. Overall, the trends suggest a strengthening financial performance and more effective use of invested capital over the analyzed period.
Decomposition of ROIC
RTX 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 exhibited significant growth from a negative value of -1.08% in 2020 to a positive 9.65% in 2021. This upward trend continued into 2022, reaching 10.88%. Although there was a decline to 7.71% in 2023, the margin recovered to 10.06% in 2024. Overall, the OPM reflects a marked improvement in operational efficiency over the five-year period, despite the minor dip in 2023.
- Turnover of Capital (TO)
- The turnover of capital has shown steady improvement year over year. Starting at 0.49 in 2020, this ratio increased incrementally through each period, reaching 0.73 by the end of 2024. This trend indicates enhanced utilization of capital resources to generate sales or revenues over time.
- 1 – Effective Cash Tax Rate (CTR)
- The effective cash tax rate, expressed inversely as (1 – CTR), began at 100% in 2020, indicating no effective tax burden or possibly a tax shield effect in that year. This value declined sharply to 81.36% in 2021 and continued to decrease to 63.9% in 2022, suggesting an increase in effective tax payments or reduced tax shields. In 2023 and 2024, the ratio rebounded slightly to 77.48% and 79.83%, respectively, indicating some variability but maintaining a higher tax payment level relative to earlier years.
- Return on Invested Capital (ROIC)
- The return on invested capital transitioned from a negative -1.38% in 2020 to a positive 4.41% in 2021, marking an initial recovery. However, the ROIC declined slightly to 4.11% in 2022 and further to 3.68% in 2023, showing some erosion in capital efficiency or profitability. In 2024, there was a notable increase to 5.82%, suggesting an improved ability to generate returns from invested capital after several years of fluctuation.
- Summary
- Overall, the financial indicators reveal a company improving operational profitability and capital efficiency following a challenging period in 2020. The operating profit margin and turnover of capital both show positive long-term trends. Although the return on invested capital experienced modest fluctuations after initial improvement, it ended with a strong gain in 2024. The effective cash tax rate has varied, with a general pattern indicative of increasing tax expenses after 2020. These patterns collectively suggest a progression toward enhanced operational performance and capital utilization, accompanied by changing tax dynamics.
Operating Profit Margin (OPM)
RTX 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 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin 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 NOPBT exhibited significant volatility during the period under review. In 2020, the figure was negative at -$611 million, indicating an operational loss. From 2021 onwards, there was a marked improvement with a substantial positive turnaround to $6,212 million. The upward trend continued in 2022, reaching $7,298 million, followed by a slight slowdown to $5,315 million in 2023. The year 2024 saw another increase, reaching the highest reported value of $8,121 million. This pattern suggests recovery and growth with some fluctuations in profitability levels.
- Net Sales
- Net sales showed a consistent upward trajectory over the five-year span. Starting at $56,587 million in 2020, sales increased each subsequent year, reaching $64,388 million in 2021 and $67,074 million in 2022. The growth pace accelerated slightly in 2023 with sales rising to $68,920 million, and a more pronounced increase occurred in 2024, peaking at $80,738 million. This steady growth in revenue demonstrates expanding market presence or increased sales volumes.
- Operating Profit Margin (OPM)
- The operating profit margin displays a notable improvement sequence. In 2020, the margin was negative at -1.08%, indicating unprofitable operations. In 2021, the margin turned positive at 9.65%, and further increased to 10.88% in 2022. However, 2023 saw a decline to 7.71%, suggesting increased costs or other operational challenges. By 2024, the margin rebounded to 10.06%, nearing previous highs. These movements reflect fluctuations in operational efficiency and cost management despite growing sales.
Turnover of Capital (TO)
RTX Corp., TO calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin 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.
- Net Sales
- Net sales have shown a consistent upward trend over the five-year period, increasing from 56,587 million USD in 2020 to 80,738 million USD in 2024. The annual growth indicates a strengthening in revenue generation, with the most significant increase observed between 2023 and 2024.
- Invested Capital
- Invested capital displays a gradual decline from 115,597 million USD in 2020 to 111,328 million USD in 2024. This decrease suggests a steady reduction in the amount of capital invested in assets or operations over the period.
- Turnover of Capital (TO)
- The turnover of capital ratio has improved consistently from 0.49 in 2020 to 0.73 in 2024. This upward trend indicates enhanced efficiency in the use of invested capital to generate sales. The increase in this ratio aligns with the rising net sales and the reduction in invested capital, highlighting an overall improvement in capital utilization efficiency.
Effective Cash Tax Rate (CTR)
RTX 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 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin 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 cash operating taxes exhibited significant fluctuation over the analyzed periods. Starting at 978 million US dollars in 2020, there was an increase to 1,158 million in 2021. A sharp rise occurred in 2022, reaching 2,635 million, followed by a decline to 1,197 million in 2023. The figure rose again in 2024 to 1,638 million. This pattern suggests variability in taxable income or changes in tax regulation impacts across the years.
- Net Operating Profit Before Taxes (NOPBT)
- Net operating profit before taxes saw a dramatic turnaround over the period. The company reported a negative NOPBT of -611 million US dollars in 2020, indicating an operating loss. However, there was a substantial recovery in 2021 to 6,212 million, which increased further to 7,298 million in 2022. Despite a decline to 5,315 million in 2023, the profit rebounded again in 2024, reaching a peak of 8,121 million. This trend reflects a notable improvement in operational performance with some volatility in profitability.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate shows a developing pattern beginning from a missing value in 2020. It emerged at 18.64% in 2021, significantly increased to 36.1% in 2022, and subsequently decreased to 22.52% in 2023. In 2024, it further declined slightly to 20.17%. The changes in the tax rate may reflect tax strategy adjustments or changes in the tax base, influencing the overall tax burden relative to pre-tax profits.