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)
Lam Research Corp., ROIC calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 25, 2023 | Jun 26, 2022 | Jun 27, 2021 | Jun 28, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net operating profit after taxes (NOPAT)1 | 3,256,005) | 4,061,570) | 5,632,304) | 4,553,546) | 2,400,750) | 1,598,307) | |
| Invested capital2 | 14,840,667) | 14,985,787) | 13,512,167) | 12,264,919) | 11,789,502) | 9,801,641) | |
| Performance Ratio | |||||||
| ROIC3 | 21.94% | 27.10% | 41.68% | 37.13% | 20.36% | 16.31% | |
| Benchmarks | |||||||
| ROIC, Competitors4 | |||||||
| Advanced Micro Devices Inc. | — | -0.35% | -0.24% | 56.77% | 30.47% | 12.00% | |
| Analog Devices Inc. | 3.09% | 7.11% | 5.76% | 2.37% | 6.95% | 8.23% | |
| Applied Materials Inc. | 28.75% | 36.75% | 46.34% | 41.96% | 29.68% | 28.97% | |
| Broadcom Inc. | 7.86% | 23.04% | 20.76% | 11.02% | 4.80% | 5.00% | |
| Intel Corp. | — | -1.60% | 4.14% | 22.03% | 28.01% | 26.78% | |
| KLA Corp. | 36.99% | 40.63% | 42.51% | 31.64% | 19.88% | 20.98% | |
| Micron Technology Inc. | 1.61% | -11.01% | 17.20% | 12.88% | 6.84% | 17.15% | |
| Monolithic Power Systems Inc. | — | 27.75% | 33.83% | 36.35% | 25.23% | 21.54% | |
| NVIDIA Corp. | 89.32% | 10.91% | 53.12% | 33.44% | 19.63% | 80.01% | |
| Qualcomm Inc. | 26.75% | 18.69% | 45.12% | 42.56% | 27.48% | 28.27% | |
| Texas Instruments Inc. | — | 28.83% | 49.74% | 48.28% | 43.48% | 43.15% | |
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27), 10-K (reporting date: 2020-06-28), 10-K (reporting date: 2019-06-30).
1 NOPAT. See details »
2 Invested capital. See details »
3 2024 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 3,256,005 ÷ 14,840,667 = 21.94%
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. | Lam Research Corp. ROIC deteriorated from 2022 to 2023 and from 2023 to 2024. |
Decomposition of ROIC
Lam Research Corp., decomposition of ROIC
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27), 10-K (reporting date: 2020-06-28), 10-K (reporting date: 2019-06-30).
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 2024 year is the decrease in efficiency measured by turnover of capital (TO) ratio.
Operating Profit Margin (OPM)
Lam Research Corp., OPM calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 25, 2023 | Jun 26, 2022 | Jun 27, 2021 | Jun 28, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net operating profit after taxes (NOPAT)1 | 3,256,005) | 4,061,570) | 5,632,304) | 4,553,546) | 2,400,750) | 1,598,307) | |
| Add: Cash operating taxes2 | 717,911) | 782,173) | 882,564) | 654,450) | 361,456) | 265,817) | |
| Net operating profit before taxes (NOPBT) | 3,973,916) | 4,843,743) | 6,514,868) | 5,207,996) | 2,762,207) | 1,864,124) | |
| Revenue | 14,905,386) | 17,428,516) | 17,227,039) | 14,626,150) | 10,044,736) | 9,653,559) | |
| Add: Increase (decrease) in deferred revenue | (286,311) | (360,193) | 1,079,292) | 581,380) | 88,122) | (544,695) | |
| Adjusted revenue | 14,619,075) | 17,068,323) | 18,306,331) | 15,207,530) | 10,132,858) | 9,108,864) | |
| Profitability Ratio | |||||||
| OPM3 | 27.18% | 28.38% | 35.59% | 34.25% | 27.26% | 20.46% | |
| Benchmarks | |||||||
| OPM, Competitors4 | |||||||
| Advanced Micro Devices Inc. | — | 2.02% | 5.31% | 22.70% | 13.87% | 6.93% | |
| Analog Devices Inc. | 20.23% | 32.00% | 27.59% | 20.52% | 26.98% | 29.60% | |
| Applied Materials Inc. | 29.32% | 29.22% | 30.32% | 30.54% | 25.67% | 23.94% | |
| Broadcom Inc. | 26.39% | 45.19% | 42.94% | 31.06% | 17.10% | 15.65% | |
| Intel Corp. | — | -0.86% | 13.58% | 28.05% | 32.68% | 33.46% | |
| KLA Corp. | 37.54% | 39.78% | 41.73% | 36.39% | 26.09% | 32.80% | |
| Micron Technology Inc. | 5.12% | -36.77% | 31.50% | 23.15% | 14.37% | 29.89% | |
| Monolithic Power Systems Inc. | — | 26.12% | 28.64% | 22.75% | 19.51% | 16.32% | |
| NVIDIA Corp. | 55.52% | 15.97% | 37.99% | 28.45% | 26.65% | 33.15% | |
| Qualcomm Inc. | 26.67% | 21.48% | 35.06% | 30.10% | 24.17% | 29.86% | |
| Texas Instruments Inc. | — | 44.51% | 51.22% | 49.60% | 43.13% | 40.81% | |
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27), 10-K (reporting date: 2020-06-28), 10-K (reporting date: 2019-06-30).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2024 Calculation
OPM = 100 × NOPBT ÷ Adjusted revenue
= 100 × 3,973,916 ÷ 14,619,075 = 27.18%
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. | Lam Research Corp. OPM deteriorated from 2022 to 2023 and from 2023 to 2024. |
Turnover of Capital (TO)
Lam Research Corp., TO calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 25, 2023 | Jun 26, 2022 | Jun 27, 2021 | Jun 28, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Revenue | 14,905,386) | 17,428,516) | 17,227,039) | 14,626,150) | 10,044,736) | 9,653,559) | |
| Add: Increase (decrease) in deferred revenue | (286,311) | (360,193) | 1,079,292) | 581,380) | 88,122) | (544,695) | |
| Adjusted revenue | 14,619,075) | 17,068,323) | 18,306,331) | 15,207,530) | 10,132,858) | 9,108,864) | |
| Invested capital1 | 14,840,667) | 14,985,787) | 13,512,167) | 12,264,919) | 11,789,502) | 9,801,641) | |
| Efficiency Ratio | |||||||
| TO2 | 0.99 | 1.14 | 1.35 | 1.24 | 0.86 | 0.93 | |
| Benchmarks | |||||||
| TO, Competitors3 | |||||||
| Advanced Micro Devices Inc. | — | 0.39 | 0.40 | 2.65 | 2.24 | 1.98 | |
| Analog Devices Inc. | 0.22 | 0.28 | 0.27 | 0.16 | 0.31 | 0.33 | |
| Applied Materials Inc. | 1.23 | 1.49 | 1.73 | 1.57 | 1.31 | 1.44 | |
| Broadcom Inc. | 0.37 | 0.57 | 0.53 | 0.42 | 0.36 | 0.38 | |
| Intel Corp. | — | 0.59 | 0.71 | 0.89 | 0.95 | 0.89 | |
| KLA Corp. | 1.17 | 1.26 | 1.18 | 1.01 | 0.89 | 0.72 | |
| Micron Technology Inc. | 0.47 | 0.29 | 0.58 | 0.60 | 0.51 | 0.60 | |
| Monolithic Power Systems Inc. | — | 1.23 | 1.46 | 1.77 | 1.33 | 1.36 | |
| NVIDIA Corp. | 1.98 | 1.26 | 1.49 | 1.28 | 0.77 | 2.45 | |
| Qualcomm Inc. | 1.26 | 1.14 | 1.50 | 1.66 | 1.33 | 1.13 | |
| Texas Instruments Inc. | — | 0.78 | 1.14 | 1.12 | 1.12 | 1.19 | |
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27), 10-K (reporting date: 2020-06-28), 10-K (reporting date: 2019-06-30).
1 Invested capital. See details »
2 2024 Calculation
TO = Adjusted revenue ÷ Invested capital
= 14,619,075 ÷ 14,840,667 = 0.99
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. | Lam Research Corp. TO deteriorated from 2022 to 2023 and from 2023 to 2024. |
Effective Cash Tax Rate (CTR)
Lam Research Corp., CTR calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 25, 2023 | Jun 26, 2022 | Jun 27, 2021 | Jun 28, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net operating profit after taxes (NOPAT)1 | 3,256,005) | 4,061,570) | 5,632,304) | 4,553,546) | 2,400,750) | 1,598,307) | |
| Add: Cash operating taxes2 | 717,911) | 782,173) | 882,564) | 654,450) | 361,456) | 265,817) | |
| Net operating profit before taxes (NOPBT) | 3,973,916) | 4,843,743) | 6,514,868) | 5,207,996) | 2,762,207) | 1,864,124) | |
| Tax Rate | |||||||
| CTR3 | 18.07% | 16.15% | 13.55% | 12.57% | 13.09% | 14.26% | |
| Benchmarks | |||||||
| CTR, Competitors4 | |||||||
| Advanced Micro Devices Inc. | — | 143.92% | 111.01% | 5.73% | 1.76% | 12.31% | |
| Analog Devices Inc. | 29.57% | 20.23% | 21.73% | 25.70% | 16.31% | 14.82% | |
| Applied Materials Inc. | 20.15% | 15.68% | 11.76% | 12.33% | 12.01% | 16.10% | |
| Broadcom Inc. | 18.62% | 10.78% | 9.59% | 16.44% | 22.63% | 15.10% | |
| Intel Corp. | — | — | 57.13% | 12.07% | 9.78% | 10.35% | |
| KLA Corp. | 15.45% | 18.86% | 13.88% | 14.30% | 14.62% | 10.70% | |
| Micron Technology Inc. | 33.29% | — | 6.38% | 6.96% | 6.13% | 4.94% | |
| Monolithic Power Systems Inc. | — | 13.92% | 18.92% | 9.60% | 2.72% | 3.20% | |
| NVIDIA Corp. | 18.77% | 45.94% | 6.28% | 8.10% | 4.59% | 1.47% | |
| Qualcomm Inc. | 20.47% | 23.51% | 14.27% | 14.84% | 14.19% | 16.37% | |
| Texas Instruments Inc. | — | 16.49% | 14.83% | 12.93% | 9.63% | 11.38% | |
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27), 10-K (reporting date: 2020-06-28), 10-K (reporting date: 2019-06-30).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2024 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 717,911 ÷ 3,973,916 = 18.07%
4 Click competitor name to see calculations.
| Tax rate | Description | The company |
|---|---|---|
| CTR | Effective cash tax rate on operating income. | Lam Research Corp. CTR increased from 2022 to 2023 and from 2023 to 2024. |