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.
Return on Invested Capital (ROIC)
CoStar Group Inc., ROIC calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net operating profit after taxes (NOPAT)1 | 321,495) | 362,411) | 250,569) | 333,240) | 240,403) | |
| Invested capital2 | 8,182,919) | 7,034,732) | 6,661,421) | 3,711,336) | 3,312,194) | |
| Performance Ratio | ||||||
| ROIC3 | 3.93% | 5.15% | 3.76% | 8.98% | 7.26% | |
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| Cintas Corp. | 20.61% | 16.72% | 15.00% | 15.49% | — | |
Based on: 10-K (reporting date: 2022-12-31), 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).
1 NOPAT. See details »
2 Invested capital. See details »
3 2022 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 321,495 ÷ 8,182,919 = 3.93%
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. | CoStar Group Inc. ROIC improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022 not reaching 2020 level. |
Decomposition of ROIC
CoStar Group Inc., decomposition of ROIC
Based on: 10-K (reporting date: 2022-12-31), 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).
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 2022 year is the increase in effective cash tax rate (CTR).
Operating Profit Margin (OPM)
CoStar Group Inc., OPM calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net operating profit after taxes (NOPAT)1 | 321,495) | 362,411) | 250,569) | 333,240) | 240,403) | |
| Add: Cash operating taxes2 | 142,190) | 94,697) | 60,078) | 65,509) | 39,802) | |
| Net operating profit before taxes (NOPBT) | 463,685) | 457,109) | 310,647) | 398,749) | 280,205) | |
| Revenues | 2,182,399) | 1,944,135) | 1,659,019) | 1,399,719) | 1,191,832) | |
| Add: Increase (decrease) in deferred revenue | 7,058) | 19,361) | 6,743) | 19,161) | 7,489) | |
| Adjusted revenues | 2,189,457) | 1,963,496) | 1,665,762) | 1,418,880) | 1,199,321) | |
| Profitability Ratio | ||||||
| OPM3 | 21.18% | 23.28% | 18.65% | 28.10% | 23.36% | |
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| Cintas Corp. | 20.27% | 19.20% | 16.82% | 17.62% | — | |
Based on: 10-K (reporting date: 2022-12-31), 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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2022 Calculation
OPM = 100 × NOPBT ÷ Adjusted revenues
= 100 × 463,685 ÷ 2,189,457 = 21.18%
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. | CoStar Group Inc. OPM improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022. |
Turnover of Capital (TO)
CoStar Group Inc., TO calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | 2,182,399) | 1,944,135) | 1,659,019) | 1,399,719) | 1,191,832) | |
| Add: Increase (decrease) in deferred revenue | 7,058) | 19,361) | 6,743) | 19,161) | 7,489) | |
| Adjusted revenues | 2,189,457) | 1,963,496) | 1,665,762) | 1,418,880) | 1,199,321) | |
| Invested capital1 | 8,182,919) | 7,034,732) | 6,661,421) | 3,711,336) | 3,312,194) | |
| Efficiency Ratio | ||||||
| TO2 | 0.27 | 0.28 | 0.25 | 0.38 | 0.36 | |
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| Cintas Corp. | 1.19 | 1.06 | 1.09 | 1.06 | — | |
Based on: 10-K (reporting date: 2022-12-31), 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).
1 Invested capital. See details »
2 2022 Calculation
TO = Adjusted revenues ÷ Invested capital
= 2,189,457 ÷ 8,182,919 = 0.27
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. | CoStar Group Inc. TO improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022. |
Effective Cash Tax Rate (CTR)
CoStar Group Inc., CTR calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net operating profit after taxes (NOPAT)1 | 321,495) | 362,411) | 250,569) | 333,240) | 240,403) | |
| Add: Cash operating taxes2 | 142,190) | 94,697) | 60,078) | 65,509) | 39,802) | |
| Net operating profit before taxes (NOPBT) | 463,685) | 457,109) | 310,647) | 398,749) | 280,205) | |
| Tax Rate | ||||||
| CTR3 | 30.67% | 20.72% | 19.34% | 16.43% | 14.20% | |
| Benchmarks | ||||||
| CTR, Competitors4 | ||||||
| Cintas Corp. | 14.50% | 17.58% | 18.30% | 17.10% | — | |
Based on: 10-K (reporting date: 2022-12-31), 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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2022 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 142,190 ÷ 463,685 = 30.67%
4 Click competitor name to see calculations.
| Tax rate | Description | The company |
|---|---|---|
| CTR | Effective cash tax rate on operating income. | CoStar Group Inc. CTR increased from 2020 to 2021 and from 2021 to 2022. |