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)

salesforce.com inc., ROIC calculation, comparison to benchmarks

	Jan 31, 2020	Jan 31, 2019	Jan 31, 2018	Jan 31, 2017	Jan 31, 2016	Jan 31, 2015
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)¹	2,330	2,601	1,799	1,311	1,016	629
Invested capital²	46,885	29,066	18,985	16,914	10,966	9,522
Performance Ratio
ROIC³	4.97%	8.95%	9.47%	7.75%	9.27%	6.61%
Benchmarks
ROIC, Competitors⁴
Adobe Inc.	21.67%	19.74%	17.25%	22.06%	21.03%	11.74%
Alphabet Inc.	—	32.75%	34.31%	19.71%	26.91%	22.22%
Autodesk Inc.	21.62%	0.93%	-11.17%	-9.45%	8.45%	10.16%
Facebook Inc.	—	27.51%	36.42%	37.03%	25.08%	9.26%
International Business Machines Corp.	—	7.84%	8.46%	5.77%	10.53%	13.69%
Intuit Inc.	20.58%	34.72%	32.34%	36.84%	34.96%	28.34%
Microsoft Corp.	48.91%	42.06%	21.26%	35.75%	53.10%	29.69%
Oracle Corp.	11.53%	15.18%	5.88%	13.04%	15.80%	14.73%
ServiceNow Inc.	—	19.88%	15.78%	15.89%	-10.81%	0.75%

Based on: 10-K (filing date: 2020-03-05), 10-K (filing date: 2019-03-08), 10-K (filing date: 2018-03-09), 10-K (filing date: 2017-03-06), 10-K (filing date: 2016-03-07), 10-K (filing date: 2015-03-06).

¹ NOPAT. See details »

² Invested capital. See details »

³ 2020 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 2,330 ÷ 46,885 = 4.97%

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.	salesforce.com inc.’s ROIC deteriorated from 2018 to 2019 and from 2019 to 2020.

salesforce.com inc., decomposition of ROIC


	ROIC	=	OPM¹	×	TO²	×	1 – CTR³
Jan 31, 2020	4.97%	=	15.13%	×	0.41	×	80.24%
Jan 31, 2019	8.95%	=	18.93%	×	0.51	×	92.52%
Jan 31, 2018	9.47%	=	16.11%	×	0.63	×	92.79%
Jan 31, 2017	7.75%	=	15.00%	×	0.57	×	90.64%
Jan 31, 2016	9.27%	=	15.40%	×	0.70	×	86.41%
Jan 31, 2015	6.61%	=	11.86%	×	0.65	×	85.98%

Based on: 10-K (filing date: 2020-03-05), 10-K (filing date: 2019-03-08), 10-K (filing date: 2018-03-09), 10-K (filing date: 2017-03-06), 10-K (filing date: 2016-03-07), 10-K (filing date: 2015-03-06).

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 2020 year is the decrease in profitability measured by operating profit margin (OPM) ratio.

salesforce.com inc., OPM calculation, comparison to benchmarks

	Jan 31, 2020	Jan 31, 2019	Jan 31, 2018	Jan 31, 2017	Jan 31, 2016	Jan 31, 2015
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)¹	2,330	2,601	1,799	1,311	1,016	629
Add: Cash operating taxes²	574	210	140	135	160	103
Net operating profit before taxes (NOPBT)	2,904	2,811	1,939	1,446	1,176	732

Revenues	17,098	13,282	10,480	8,392	6,667	5,374
Add: Increase (decrease) in unearned revenue	2,098	1,569	1,552	1,251	970	799
Adjusted revenues	19,196	14,851	12,032	9,643	7,637	6,173
Profitability Ratio
OPM³	15.13%	18.93%	16.11%	15.00%	15.40%	11.86%
Benchmarks
OPM, Competitors⁴
Adobe Inc.	34.42%	31.93%	35.32%	33.91%	31.32%	24.23%
Alphabet Inc.	—	23.20%	23.81%	24.25%	26.49%	25.64%
Autodesk Inc.	30.50%	3.88%	-13.37%	-9.48%	13.40%	12.87%
Facebook Inc.	—	34.36%	44.37%	49.93%	44.85%	34.99%
International Business Machines Corp.	—	16.43%	14.56%	16.13%	16.19%	19.65%
Intuit Inc.	29.33%	28.32%	25.71%	28.07%	29.36%	24.51%
Microsoft Corp.	38.29%	36.61%	35.11%	31.99%	30.09%	19.34%
Oracle Corp.	34.29%	34.21%	35.42%	34.66%	35.32%	35.82%
ServiceNow Inc.	—	14.97%	14.28%	13.97%	-7.00%	2.38%

Based on: 10-K (filing date: 2020-03-05), 10-K (filing date: 2019-03-08), 10-K (filing date: 2018-03-09), 10-K (filing date: 2017-03-06), 10-K (filing date: 2016-03-07), 10-K (filing date: 2015-03-06).

¹ NOPAT. See details »

² Cash operating taxes. See details »

³ 2020 Calculation
OPM = 100 × NOPBT ÷ Adjusted revenues
= 100 × 2,904 ÷ 19,196 = 15.13%

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.	salesforce.com inc.’s OPM improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

salesforce.com inc., TO calculation, comparison to benchmarks

	Jan 31, 2020	Jan 31, 2019	Jan 31, 2018	Jan 31, 2017	Jan 31, 2016	Jan 31, 2015
Selected Financial Data (US$ in millions)
Revenues	17,098	13,282	10,480	8,392	6,667	5,374
Add: Increase (decrease) in unearned revenue	2,098	1,569	1,552	1,251	970	799
Adjusted revenues	19,196	14,851	12,032	9,643	7,637	6,173

Invested capital¹	46,885	29,066	18,985	16,914	10,966	9,522
Efficiency Ratio
TO²	0.41	0.51	0.63	0.57	0.70	0.65
Benchmarks
TO, Competitors³
Adobe Inc.	0.70	0.67	0.61	0.77	0.77	0.66
Alphabet Inc.	—	1.61	1.58	1.69	1.25	1.05
Autodesk Inc.	0.76	0.61	0.69	0.67	0.79	0.83
Facebook Inc.	—	1.08	0.93	0.98	0.71	0.57
International Business Machines Corp.	—	0.59	0.71	0.73	0.75	0.81
Intuit Inc.	0.89	1.50	1.50	1.80	1.77	1.58
Microsoft Corp.	1.52	1.49	1.52	1.31	1.94	2.27
Oracle Corp.	0.44	0.55	0.55	0.49	0.58	0.57
ServiceNow Inc.	—	1.36	1.18	1.24	1.33	1.14

Based on: 10-K (filing date: 2020-03-05), 10-K (filing date: 2019-03-08), 10-K (filing date: 2018-03-09), 10-K (filing date: 2017-03-06), 10-K (filing date: 2016-03-07), 10-K (filing date: 2015-03-06).

¹ Invested capital. See details »

² 2020 Calculation
TO = Adjusted revenues ÷ Invested capital
= 19,196 ÷ 46,885 = 0.41

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.	salesforce.com inc.’s TO deteriorated from 2018 to 2019 and from 2019 to 2020.

salesforce.com inc., CTR calculation, comparison to benchmarks

	Jan 31, 2020	Jan 31, 2019	Jan 31, 2018	Jan 31, 2017	Jan 31, 2016	Jan 31, 2015
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)¹	2,330	2,601	1,799	1,311	1,016	629
Add: Cash operating taxes²	574	210	140	135	160	103
Net operating profit before taxes (NOPBT)	2,904	2,811	1,939	1,446	1,176	732
Tax Rate
CTR³	19.76%	7.48%	7.21%	9.36%	13.59%	14.02%
Benchmarks
CTR, Competitors⁴
Adobe Inc.	9.63%	7.06%	19.97%	15.15%	12.85%	26.06%
Alphabet Inc.	—	12.46%	8.68%	52.04%	18.98%	17.49%
Autodesk Inc.	6.38%	60.79%	—	—	20.47%	5.36%
Facebook Inc.	—	25.67%	11.36%	24.12%	21.75%	53.24%
International Business Machines Corp.	—	18.55%	18.30%	51.29%	13.24%	13.55%
Intuit Inc.	21.07%	18.38%	16.40%	27.07%	32.70%	26.75%
Microsoft Corp.	15.80%	22.65%	60.11%	14.62%	9.05%	32.49%
Oracle Corp.	23.42%	19.20%	70.01%	22.82%	22.47%	27.32%
ServiceNow Inc.	—	2.51%	6.49%	8.20%	—	72.30%

Based on: 10-K (filing date: 2020-03-05), 10-K (filing date: 2019-03-08), 10-K (filing date: 2018-03-09), 10-K (filing date: 2017-03-06), 10-K (filing date: 2016-03-07), 10-K (filing date: 2015-03-06).

¹ NOPAT. See details »

² Cash operating taxes. See details »

³ 2020 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 574 ÷ 2,904 = 19.76%

⁴ Click competitor name to see calculations.

Tax rate	Description	The company
CTR	Effective cash tax rate on operating income.	salesforce.com inc.’s CTR increased from 2018 to 2019 and from 2019 to 2020.

salesforce.com inc. (NYSE:CRM)

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)