Stock Analysis on Net

ServiceNow Inc. (NYSE:NOW)

$19.99

Return on Capital (ROC)

Microsoft Excel

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Return on Invested Capital (ROIC)

ServiceNow Inc., ROIC calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1
Invested capital2
Performance Ratio
ROIC3
Benchmarks
ROIC, Competitors4
Accenture PLC
Adobe Inc.
International Business Machines Corp.
Intuit Inc.
Mastercard Inc.
Microsoft Corp.
Oracle Corp.
PayPal Holdings Inc.
Salesforce Inc.
Visa Inc.

Based on: 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), 10-K (reporting date: 2017-12-31).

1 NOPAT. See details »

2 Invested capital. See details »

3 2021 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × ÷ =

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. ServiceNow Inc. ROIC improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.

Decomposition of ROIC

ServiceNow Inc., decomposition of ROIC

Microsoft Excel
ROIC = OPM1 × TO2 × 1 – CTR3
Dec 31, 2021 = × ×
Dec 31, 2020 = × ×
Dec 31, 2019 = × ×
Dec 31, 2018 = × ×
Dec 31, 2017 = × ×

Based on: 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), 10-K (reporting date: 2017-12-31).

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 2021 year is the decrease in efficiency measured by turnover of capital (TO) ratio.


Operating Profit Margin (OPM)

ServiceNow Inc., OPM calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1
Add: Cash operating taxes2
Net operating profit before taxes (NOPBT)
 
Revenues
Add: Increase (decrease) in deferred revenue
Adjusted revenues
Profitability Ratio
OPM3
Benchmarks
OPM, Competitors4
Accenture PLC
Adobe Inc.
International Business Machines Corp.
Intuit Inc.
Mastercard Inc.
Microsoft Corp.
Oracle Corp.
PayPal Holdings Inc.
Salesforce Inc.
Visa Inc.

Based on: 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), 10-K (reporting date: 2017-12-31).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2021 Calculation
OPM = 100 × NOPBT ÷ Adjusted revenues
= 100 × ÷ =

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. ServiceNow Inc. OPM improved from 2019 to 2020 but then slightly deteriorated from 2020 to 2021.

Turnover of Capital (TO)

ServiceNow Inc., TO calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Selected Financial Data (US$ in millions)
Revenues
Add: Increase (decrease) in deferred revenue
Adjusted revenues
 
Invested capital1
Efficiency Ratio
TO2
Benchmarks
TO, Competitors3
Accenture PLC
Adobe Inc.
International Business Machines Corp.
Intuit Inc.
Mastercard Inc.
Microsoft Corp.
Oracle Corp.
PayPal Holdings Inc.
Salesforce Inc.
Visa Inc.

Based on: 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), 10-K (reporting date: 2017-12-31).

1 Invested capital. See details »

2 2021 Calculation
TO = Adjusted revenues ÷ Invested capital
= ÷ =

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. ServiceNow Inc. TO deteriorated from 2019 to 2020 and from 2020 to 2021.

Effective Cash Tax Rate (CTR)

ServiceNow Inc., CTR calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
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
Accenture PLC
Adobe Inc.
International Business Machines Corp.
Intuit Inc.
Mastercard Inc.
Microsoft Corp.
Oracle Corp.
PayPal Holdings Inc.
Salesforce Inc.
Visa Inc.

Based on: 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), 10-K (reporting date: 2017-12-31).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2021 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × ÷ =

4 Click competitor name to see calculations.

Tax rate Description The company
CTR Effective cash tax rate on operating income. ServiceNow Inc. CTR increased from 2019 to 2020 but then slightly decreased from 2020 to 2021.