Stock Analysis on Net

Walgreens Boots Alliance Inc. (NASDAQ:WBA)

This company has been moved to the archive! The financial data has not been updated since July 9, 2020.

Return on Capital (ROC)

Microsoft Excel

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)

Walgreens Boots Alliance Inc., ROIC calculation, comparison to benchmarks

Microsoft Excel
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 5,719 5,934 5,246 4,855 5,501 3,086
Invested capital2 77,429 76,286 76,485 85,356 80,730 55,001
Performance Ratio
ROIC3 7.39% 7.78% 6.86% 5.69% 6.81% 5.61%
Benchmarks
ROIC, Competitors4
Costco Wholesale Corp. 16.61%
Dollar General Corp. 10.94%
Target Corp. 14.14%
Walmart Inc. 5.72%

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

1 NOPAT. See details »

2 Invested capital. See details »

3 2019 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 5,719 ÷ 77,429 = 7.39%

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. Walgreens Boots Alliance Inc. ROIC improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

Decomposition of ROIC

Walgreens Boots Alliance Inc., decomposition of ROIC

Microsoft Excel
ROIC = OPM1 × TO2 × 1 – CTR3
Aug 31, 2019 7.39% = 4.79% × 1.77 × 87.31%
Aug 31, 2018 7.78% = 5.82% × 1.72 × 77.50%
Aug 31, 2017 6.86% = 5.93% × 1.55 × 74.81%
Aug 31, 2016 5.69% = 5.72% × 1.37 × 72.34%
Aug 31, 2015 6.81% = 6.93% × 1.28 × 76.75%
Aug 31, 2014 5.61% = 6.27% × 1.39 × 64.39%

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

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 2019 year is the decrease in profitability measured by operating profit margin (OPM) ratio.


Operating Profit Margin (OPM)

Walgreens Boots Alliance Inc., OPM calculation, comparison to benchmarks

Microsoft Excel
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 5,719 5,934 5,246 4,855 5,501 3,086
Add: Cash operating taxes2 831 1,723 1,767 1,856 1,667 1,707
Net operating profit before taxes (NOPBT) 6,550 7,657 7,013 6,711 7,167 4,792
 
Sales 136,866 131,537 118,214 117,351 103,444 76,392
Profitability Ratio
OPM3 4.79% 5.82% 5.93% 5.72% 6.93% 6.27%
Benchmarks
OPM, Competitors4
Costco Wholesale Corp. 3.30%
Dollar General Corp. 9.52%
Target Corp. 5.67%
Walmart Inc. 2.84%

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2019 Calculation
OPM = 100 × NOPBT ÷ Sales
= 100 × 6,550 ÷ 136,866 = 4.79%

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. Walgreens Boots Alliance Inc. OPM deteriorated from 2017 to 2018 and from 2018 to 2019.

Turnover of Capital (TO)

Walgreens Boots Alliance Inc., TO calculation, comparison to benchmarks

Microsoft Excel
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
Selected Financial Data (US$ in millions)
Sales 136,866 131,537 118,214 117,351 103,444 76,392
Invested capital1 77,429 76,286 76,485 85,356 80,730 55,001
Efficiency Ratio
TO2 1.77 1.72 1.55 1.37 1.28 1.39
Benchmarks
TO, Competitors3
Costco Wholesale Corp. 6.23
Dollar General Corp. 1.42
Target Corp. 2.86
Walmart Inc. 3.21

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

1 Invested capital. See details »

2 2019 Calculation
TO = Sales ÷ Invested capital
= 136,866 ÷ 77,429 = 1.77

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. Walgreens Boots Alliance Inc. TO improved from 2017 to 2018 and from 2018 to 2019.

Effective Cash Tax Rate (CTR)

Walgreens Boots Alliance Inc., CTR calculation, comparison to benchmarks

Microsoft Excel
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 5,719 5,934 5,246 4,855 5,501 3,086
Add: Cash operating taxes2 831 1,723 1,767 1,856 1,667 1,707
Net operating profit before taxes (NOPBT) 6,550 7,657 7,013 6,711 7,167 4,792
Tax Rate
CTR3 12.69% 22.50% 25.19% 27.66% 23.25% 35.61%
Benchmarks
CTR, Competitors4
Costco Wholesale Corp. 19.18%
Dollar General Corp. 18.75%
Target Corp. 12.76%
Walmart Inc. 37.20%

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2019 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 831 ÷ 6,550 = 12.69%

4 Click competitor name to see calculations.

Tax rate Description The company
CTR Effective cash tax rate on operating income. Walgreens Boots Alliance Inc. CTR decreased from 2017 to 2018 and from 2018 to 2019.