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.
Paying user area
Try for free
Sherwin-Williams Co. pages available for free this week:
- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- Analysis of Liquidity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Debt
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Sherwin-Williams Co. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Return on Invested Capital (ROIC)
Sherwin-Williams Co., ROIC calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| ROIC3 | ||||||
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| Linde plc | ||||||
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 net operating profit demonstrated a consistent upward trend over the five-year period. It increased from approximately 2.19 billion US dollars in 2020 to nearly 2.96 billion US dollars in 2024. This represents a cumulative growth indicating improving operational efficiency or enhanced profitability over the period. Notably, the increase between 2023 and 2024 marks the largest annual increment in the dataset.
- Invested Capital
- The invested capital showed some fluctuations but generally followed a slight upward trajectory. Starting at about 15.49 billion US dollars in 2020, it peaked in 2022 at approximately 17.35 billion US dollars before decreasing to around 16.41 billion US dollars in 2023 and then slightly rising again to 16.71 billion US dollars in 2024. This pattern suggests some adjustments in capital deployment, possibly reflecting strategic investment decisions or asset base optimization.
- Return on Invested Capital (ROIC)
- The return on invested capital generally improved during the analyzed period, starting at 14.14% in 2020 and rising to 17.73% by 2024. After a slight dip from 14.91% in 2021 to 14.29% in 2022, the ratio recovered and increased steadily over the last two years. The upward momentum in ROIC, particularly post-2022, indicates enhanced effectiveness in utilizing invested capital to generate profits, which aligns with the observed growth in NOPAT relative to the invested capital base.
Decomposition of ROIC
Sherwin-Williams Co., 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 a fluctuating yet generally positive trend over the period. It decreased from 15.84% in 2020 to 14.56% in 2021, followed by a slight recovery to 14.76% in 2022 and 14.82% in 2023. There was a notable increase in 2024, reaching 16.93%, the highest value in the observed timeframe. This suggests an improvement in profitability efficiency in the most recent year evaluated.
- Turnover of Capital (TO)
- The turnover of capital showed a steady upward trend throughout the years. Starting at 1.19 in 2020, it increased annually to 1.26 in 2021, 1.28 in 2022, 1.40 in 2023, and slightly decreased to 1.38 in 2024. Overall, the trend indicates enhanced efficiency in utilizing capital to generate revenue, with a marginal dip in the final year.
- 1 – Effective Cash Tax Rate (CTR)
- The metric representing one minus the effective cash tax rate demonstrated variability but without a clear directional trend. It rose sharply from 75.32% in 2020 to 81.21% in 2021, decreased to 75.79% in 2022, declined further to 73.43% in 2023, and then increased again to 75.75% in 2024. These fluctuations reflect changes in tax efficiency or tax-related operational factors over the period without a sustained improvement or decline.
- Return on Invested Capital (ROIC)
- The return on invested capital evidenced a generally increasing pattern. From 14.14% in 2020, it grew to 14.91% in 2021 but slightly decreased to 14.29% in 2022. This was followed by a rise to 15.29% in 2023 and a significant increase to 17.73% in 2024, marking the strongest return in the dataset. The steady gains in ROIC towards the end suggest improved effectiveness in capital deployment and value creation.
Operating Profit Margin (OPM)
Sherwin-Williams Co., 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 thousands) | ||||||
| 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 | ||||||
| Linde plc | ||||||
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 showed a generally increasing trend over the five-year period. Starting at approximately 2.91 billion USD in 2020, it remained relatively stable in 2021 before rising to about 3.27 billion USD in 2022. This upward trajectory continued in 2023, reaching nearly 3.42 billion USD, and further increased to approximately 3.91 billion USD by the end of 2024. This growth indicates improving profitability in core operations over time.
- Net sales
- Net sales demonstrated a consistent upward trend from 2020 through 2024. Beginning at around 18.36 billion USD in 2020, sales increased each year, reaching nearly 23.10 billion USD by 2024. The highest growth occurred between 2020 and 2022, with a slowing but steady increase in the subsequent years, indicating expanding revenue generation capabilities.
- Operating profit margin (OPM)
- The operating profit margin showed some fluctuations but ultimately presented an improvement over the period. The margin decreased from 15.84% in 2020 to 14.56% in 2021, before slightly recovering to 14.76% and 14.82% in 2022 and 2023, respectively. By 2024, the margin increased significantly to 16.93%, surpassing prior levels. This suggests enhanced efficiency or cost management contributing to stronger profitability relative to sales.
Turnover of Capital (TO)
Sherwin-Williams Co., 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 thousands) | ||||||
| Net sales | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| Linde plc | ||||||
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 analysis of the financial data over the five-year period reveals several key trends regarding sales, invested capital, and the efficiency of capital utilization.
- Net Sales
- Net sales have shown consistent growth from 2020 to 2024. Starting at approximately 18.36 billion US dollars in 2020, sales increased steadily each year, reaching around 23.1 billion US dollars in 2023, with a slight increase to about 23.1 billion US dollars in 2024. The growth pace appears to have decelerated in the final year, indicating a potential plateau in revenue expansion.
- Invested Capital
- Invested capital experienced fluctuations during the same period. It initially increased from about 15.49 billion US dollars in 2020 to roughly 17.35 billion US dollars in 2022. However, it then declined to approximately 16.41 billion in 2023 before marginally rising to around 16.71 billion in 2024. This pattern suggests some capital optimization or divestment activities following a phase of expansion.
- Turnover of Capital (TO)
- The turnover of capital ratio demonstrates improvement over these years. It rose from 1.19 in 2020 to a peak of 1.40 in 2023, before a slight decrease to 1.38 in 2024. This positive trend indicates increasing efficiency in utilizing invested capital to generate sales, with a minor drop in the last year that could imply stabilization in operational effectiveness.
In summary, the data reflects a growing revenue base accompanied by total invested capital adjustments that suggest a strategic reevaluation or capital management. The improved capital turnover ratio points to enhanced operational efficiency, with a minor slowdown at the end of the period that may warrant further attention.
Effective Cash Tax Rate (CTR)
Sherwin-Williams Co., 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 thousands) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Tax Rate | ||||||
| CTR3 | ||||||
| Benchmarks | ||||||
| CTR, Competitors4 | ||||||
| Linde plc | ||||||
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 exhibit a fluctuating upward trend over the observed periods. Starting at approximately 717.8 million US dollars in 2020, a decline is seen in 2021 with cash taxes dropping to about 545.6 million. Following this decrease, a consistent increase occurs through 2022 to 2024, reaching nearly 948.1 million dollars by the end of 2024. This suggests a growing tax burden in recent years after a temporary reduction in 2021.
- Net Operating Profit Before Taxes (NOPBT)
- The net operating profit before taxes shows a general ascending trajectory across the five-year span. Beginning at around 2.91 billion US dollars in 2020, there is a slight dip in 2021 but it quickly rebounds and continues to increase steadily through 2022 to 2024. By the end of 2024, NOPBT reaches just under 3.91 billion dollars, indicating an overall improvement in operating profitability before tax considerations.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate displays variability within a range roughly between 18.79% and 26.57%. The lowest rate occurs in 2021 at 18.79%, coinciding with the year when cash operating taxes were reduced despite relatively stable NOPBT. After 2021, the effective CTR rises again to a peak of 26.57% in 2023 before declining somewhat to 24.25% in 2024. This pattern suggests fluctuating tax efficiency or changes in tax policy affecting the company's tax payments relative to its operating profits.