Return on capital (ROC) is after tax rate of return on net business assets. ROIC is unaffected by changes in interest rates or company’s debt and equity structure. It measures business productivity performance.

Return on Invested Capital (ROIC)
Decomposition of ROIC
Operating Profit Margin (OPM)
Turnover of Capital (TO)
Effective Cash Tax Rate (CTR)

TJX Cos. Inc., ROIC calculation, comparison to benchmarks

	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017	Jan 30, 2016	Jan 31, 2015
Selected Financial Data (US$ in thousands)
Net operating profit after taxes (NOPAT)¹	3,485,115	3,155,360	2,635,209	2,446,942	2,503,986	2,500,016
Invested capital²	18,215,895	16,960,214	16,160,847	14,935,402	13,469,411	13,017,789
Performance Ratio
ROIC³	19.13%	18.60%	16.31%	16.38%	18.59%	19.20%
Benchmarks
ROIC, Competitors⁴
Amazon.com Inc.	—	12.59%	13.28%	5.94%	10.40%	7.00%
Costco Wholesale Corp.	15.00%	16.91%	16.47%	14.89%	14.63%	13.82%
Dollar General Corp.	11.22%	10.94%	9.31%	8.86%	8.94%	8.15%
Home Depot Inc.	34.91%	35.70%	27.93%	25.73%	23.46%	22.47%
Lowe’s Cos. Inc.	18.00%	12.51%	15.33%	14.36%	12.78%	13.07%
Target Corp.	14.30%	14.14%	12.07%	12.75%	12.12%	10.31%
Walmart Inc.	10.88%	5.72%	8.64%	11.52%	10.49%	12.30%

Based on: 10-K (filing date: 2020-03-27), 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31).

¹ NOPAT. See details »

² Invested capital. See details »

³ 2020 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 3,485,115 ÷ 18,215,895 = 19.13%

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.	TJX Cos. Inc.’s ROIC improved from 2018 to 2019 and from 2019 to 2020.

TJX Cos. Inc., decomposition of ROIC


	ROIC	=	OPM¹	×	TO²	×	1 – CTR³
Feb 1, 2020	19.13%	=	11.23%	×	2.29	×	74.41%
Feb 2, 2019	18.60%	=	11.30%	×	2.30	×	71.63%
Feb 3, 2018	16.31%	=	11.44%	×	2.22	×	64.20%
Jan 28, 2017	16.38%	=	11.94%	×	2.22	×	61.78%
Jan 30, 2016	18.59%	=	12.79%	×	2.30	×	63.25%
Jan 31, 2015	19.20%	=	13.18%	×	2.23	×	65.26%

Based on: 10-K (filing date: 2020-03-27), 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31).

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 2020 year is the decrease in effective cash tax rate (CTR).

TJX Cos. Inc., OPM calculation, comparison to benchmarks

	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017	Jan 30, 2016	Jan 31, 2015
Selected Financial Data (US$ in thousands)
Net operating profit after taxes (NOPAT)¹	3,485,115	3,155,360	2,635,209	2,446,942	2,503,986	2,500,016
Add: Cash operating taxes²	1,198,702	1,249,999	1,469,322	1,513,869	1,455,152	1,331,126
Net operating profit before taxes (NOPBT)	4,683,817	4,405,359	4,104,531	3,960,811	3,959,138	3,831,142

Net sales	41,716,977	38,972,934	35,864,664	33,183,744	30,944,938	29,078,407
Profitability Ratio
OPM³	11.23%	11.30%	11.44%	11.94%	12.79%	13.18%
Benchmarks
OPM, Competitors⁴
Amazon.com Inc.	—	6.37%	6.29%	3.30%	4.62%	3.15%
Costco Wholesale Corp.	3.37%	3.30%	3.41%	3.31%	3.23%	3.31%
Dollar General Corp.	9.65%	9.52%	9.56%	10.23%	10.43%	10.17%
Home Depot Inc.	14.80%	14.70%	15.10%	14.77%	13.94%	13.32%
Lowe’s Cos. Inc.	8.61%	6.38%	9.56%	9.72%	9.07%	9.26%
Target Corp.	6.17%	5.67%	6.18%	7.35%	7.67%	6.41%
Walmart Inc.	4.52%	2.84%	3.65%	4.93%	5.26%	5.84%

Based on: 10-K (filing date: 2020-03-27), 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31).

¹ NOPAT. See details »

² Cash operating taxes. See details »

³ 2020 Calculation
OPM = 100 × NOPBT ÷ Net sales
= 100 × 4,683,817 ÷ 41,716,977 = 11.23%

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.	TJX Cos. Inc.’s OPM deteriorated from 2018 to 2019 and from 2019 to 2020.

TJX Cos. Inc., TO calculation, comparison to benchmarks

	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017	Jan 30, 2016	Jan 31, 2015
Selected Financial Data (US$ in thousands)
Net sales	41,716,977	38,972,934	35,864,664	33,183,744	30,944,938	29,078,407
Invested capital¹	18,215,895	16,960,214	16,160,847	14,935,402	13,469,411	13,017,789
Efficiency Ratio
TO²	2.29	2.30	2.22	2.22	2.30	2.23
Benchmarks
TO, Competitors³
Amazon.com Inc.	—	2.21	2.28	2.26	3.20	3.24
Costco Wholesale Corp.	5.76	6.35	6.80	6.81	6.29	6.55
Dollar General Corp.	1.45	1.42	1.35	1.35	1.35	1.27
Home Depot Inc.	3.01	3.17	2.87	2.75	2.62	2.59
Lowe’s Cos. Inc.	2.69	2.86	2.47	2.39	2.41	2.29
Target Corp.	2.83	2.86	2.66	2.57	2.57	2.41
Walmart Inc.	3.11	3.21	3.48	3.24	3.07	3.21

Based on: 10-K (filing date: 2020-03-27), 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31).

¹ Invested capital. See details »

² 2020 Calculation
TO = Net sales ÷ Invested capital
= 41,716,977 ÷ 18,215,895 = 2.29

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.	TJX Cos. Inc.’s TO improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.

TJX Cos. Inc., CTR calculation, comparison to benchmarks

	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017	Jan 30, 2016	Jan 31, 2015
Selected Financial Data (US$ in thousands)
Net operating profit after taxes (NOPAT)¹	3,485,115	3,155,360	2,635,209	2,446,942	2,503,986	2,500,016
Add: Cash operating taxes²	1,198,702	1,249,999	1,469,322	1,513,869	1,455,152	1,331,126
Net operating profit before taxes (NOPBT)	4,683,817	4,405,359	4,104,531	3,960,811	3,959,138	3,831,142
Tax Rate
CTR³	25.59%	28.37%	35.80%	38.22%	36.75%	34.74%
Benchmarks
CTR, Competitors⁴
Amazon.com Inc.	—	10.59%	7.26%	20.39%	29.64%	31.33%
Costco Wholesale Corp.	22.65%	19.18%	28.98%	34.06%	27.96%	36.17%
Dollar General Corp.	19.88%	18.75%	27.64%	35.82%	36.32%	36.89%
Home Depot Inc.	21.74%	23.26%	35.67%	36.71%	35.80%	34.80%
Lowe’s Cos. Inc.	22.32%	31.40%	34.96%	38.25%	41.52%	38.25%
Target Corp.	18.12%	12.76%	26.52%	32.40%	38.55%	33.25%
Walmart Inc.	22.54%	37.20%	31.97%	27.77%	35.04%	34.38%

Based on: 10-K (filing date: 2020-03-27), 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31).

¹ NOPAT. See details »

² Cash operating taxes. See details »

³ 2020 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 1,198,702 ÷ 4,683,817 = 25.59%

⁴ Click competitor name to see calculations.

Tax rate	Description	The company
CTR	Effective cash tax rate on operating income.	TJX Cos. Inc.’s CTR decreased from 2018 to 2019 and from 2019 to 2020.

TJX Cos. Inc. (NYSE:TJX)

Return on Capital (ROC)

Return on Invested Capital (ROIC)

Decomposition of ROIC

Operating Profit Margin (OPM)

Turnover of Capital (TO)

Effective Cash Tax Rate (CTR)