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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- Cash Flow Statement
- Common-Size Income Statement
- Analysis of Liquidity Ratios
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Dividend Discount Model (DDM)
- Operating Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Debt to Equity since 2005
- Price to Operating Profit (P/OP) since 2005
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Return on Invested Capital (ROIC)
Union Pacific 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 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
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 value shows an overall increasing trend from 2020 through 2024. Starting at 6,650 million USD in 2020, it rose to 7,625 million USD in 2021 and continued to increase to 8,288 million USD in 2022. However, there was a decline in 2023 to 7,558 million USD, followed by a moderate recovery in 2024 to 7,772 million USD. Despite the dip in 2023, the NOPAT in 2024 remains above the 2020 level, reflecting growth over the five-year period.
- Invested Capital
- Invested capital exhibited a relatively stable pattern over the years with a gradual upward movement. The value was approximately 58,340 million USD in 2020, slightly decreasing to 58,241 million USD in 2021. From 2022 onward, a steady increase is observed, with invested capital climbing to 59,751 million USD in 2022, 61,524 million USD in 2023, and reaching 62,044 million USD in 2024. This gradual increase suggests ongoing investments or asset base growth.
- Return on Invested Capital (ROIC)
- The ROIC percentage experienced fluctuations consistent with changes in NOPAT and invested capital. Starting at 11.4% in 2020, ROIC increased notably to 13.09% in 2021 and peaked at 13.87% in 2022. Subsequently, ROIC declined to 12.28% in 2023 but showed a slight rebound to 12.53% in 2024. The trend indicates improved efficiency in capital utilization through 2022, followed by some deterioration and partial recovery in later years.
Decomposition of ROIC
Union Pacific 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 a fluctuating trend over the observed periods. It increased from 41.95% in 2020 to a peak of 44.4% in 2021. This was followed by a decline to 41.7% in 2022 and further down to 39.71% in 2023. In 2024, the margin showed a recovery to 41.47%. Overall, the margin reflects some volatility but remained above 39% throughout the period.
- Turnover of Capital (TO)
- The turnover of capital ratio steadily improved from 0.33 in 2020 to 0.42 in 2022, indicating increased efficiency in using capital to generate revenue. However, it slightly declined and stabilized at 0.39 in both 2023 and 2024, suggesting a plateau in capital utilization efficiency after initial growth.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate declined gradually over the timeframe, starting at 81.17% in 2020 and then decreasing to 77.28% in 2024. This consistent reduction in the cash tax rate may indicate improved tax planning or favorable changes in tax legislation impacting the company.
- Return on Invested Capital (ROIC)
- Return on invested capital showed an upward trend from 11.4% in 2020 to 13.87% in 2022, reflecting enhanced profitability from invested capital. This was followed by a slight decrease to 12.28% in 2023, but a modest recovery to 12.53% in 2024. The overall trend indicates effective use of invested capital, despite some recent moderation.
Operating Profit Margin (OPM)
Union Pacific 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) | ||||||
| Operating revenues | ||||||
| Profitability Ratio | ||||||
| OPM3 | ||||||
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
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 ÷ Operating revenues
= 100 × ÷ =
4 Click competitor name to see calculations.
The financial data reveals several notable trends over the five-year period under review.
- Net Operating Profit Before Taxes (NOPBT)
- NOPBT demonstrates an overall upward trajectory from 8193 million USD in 2020 to 10056 million USD in 2024. The peak value occurs in 2022 at 10374 million USD, followed by a decline to 9578 million USD in 2023, and a partial recovery in 2024. This indicates some volatility but general growth in profitability before taxes.
- Operating Revenues
- Operating revenues consistently increased from 19533 million USD in 2020 to 24875 million USD in 2022, showing robust growth. However, there is a slight decline in 2023 to 24119 million USD, with a marginal increase again in 2024 to 24250 million USD. The trend suggests initial strong revenue growth with slight stabilization or mild contraction in later years.
- Operating Profit Margin (OPM)
- The operating profit margin fluctuates during the period. It rose from 41.95% in 2020 to a peak of 44.4% in 2021, then decreased steadily to a low of 39.71% in 2023 before improving modestly to 41.47% in 2024. This pattern indicates some pressure on operational efficiency or cost management affecting margins after 2021.
Overall, the data depicts growth in both profitability and revenues, tempered by volatility in recent years. The company experienced increasing operating revenues and NOPBT through 2022, followed by some declines in 2023 with a partial rebound in 2024. The fluctuating profit margin after 2021 suggests potential challenges in maintaining operational efficiency amid changing market or cost conditions.
Turnover of Capital (TO)
Union Pacific 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) | ||||||
| Operating revenues | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
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 = Operating revenues ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
- Operating Revenues
- The operating revenues displayed an overall increasing trend from 2020 to 2024, rising from 19,533 million US dollars in 2020 to 24,250 million US dollars in 2024. Notable growth occurred between 2020 and 2022, with revenues increasing by approximately 27.3%. However, in 2023, a slight decline to 24,119 million US dollars was observed before a marginal recovery in 2024.
- Invested Capital
- Invested capital showed a steady increase over the five-year period, progressing from 58,340 million US dollars in 2020 to 62,044 million US dollars in 2024. Although the rise was modest, with an approximate cumulative growth of 6.3%, it denotes continuous capital investment, especially between 2021 and 2024.
- Turnover of Capital (TO)
- The turnover of capital ratio improved markedly from 0.33 in 2020 to a peak of 0.42 in 2022, indicating enhanced efficiency in utilizing invested capital to generate revenues during this period. Subsequently, the ratio declined to 0.39 in 2023 and remained stable through 2024, suggesting a slight reduction in capital efficiency compared to the peak year but still above the initial levels observed in 2020 and 2021.
- Overall Insights
- The data reveals growth in operating revenues supported by incremental increases in invested capital. The peak in capital turnover in 2022 points to a year of optimal capital utilization, followed by a stabilization phase with slightly diminished efficiency in the subsequent years. This trend could indicate challenges in maintaining the momentum of revenue growth relative to capital investment or a strategic decision to invest in longer-term assets affecting short-term turnover ratios.
Effective Cash Tax Rate (CTR)
Union Pacific 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 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
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.
The financial data reveals a general upward trend in cash operating taxes over the five-year period. Starting at 1,543 million US dollars in 2020, cash operating taxes increased steadily to 2,285 million US dollars by the end of 2024. This rise indicates a growing tax expense related to operating activities.
Net operating profit before taxes (NOPBT) shows growth from 8,193 million US dollars in 2020 to a peak of 10,374 million US dollars in 2022. However, there is a slight decline to 9,578 million US dollars in 2023, followed by a recovery to 10,056 million US dollars in 2024. This fluctuation suggests some variability in operating profitability during this period.
The effective cash tax rate (CTR) increased overall, starting at 18.83% in 2020 and rising to 22.72% in 2024. Despite minor fluctuations, the tax rate exhibits a general upward trajectory, which, combined with increasing tax payments, signals a trend towards higher taxation relative to operating profits.
- Cash Operating Taxes
- Increased steadily over five years, demonstrating rising tax expenses on operations.
- Net Operating Profit Before Taxes (NOPBT)
- Displayed growth peaking in 2022, with a subsequent dip in 2023 before partially recovering in 2024, indicating some inconsistency in profitability.
- Effective Cash Tax Rate (CTR)
- Rose from below 19% to nearly 23%, reflecting a trend of increasing tax burden relative to profits.
Overall, the data illustrates a scenario of increasing profitability with accompanying higher tax obligations and an elevated effective tax rate, suggesting a possibly less favorable tax environment or changes in tax structures over the analyzed period.