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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- Income Statement
- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Price to FCFE (P/FCFE)
- Net Profit Margin since 2005
- Debt to Equity since 2005
- Price to Earnings (P/E) since 2005
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Return on Invested Capital (ROIC)
Johnson Controls International plc, ROIC calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | |||||||
| Invested capital2 | |||||||
| Performance Ratio | |||||||
| ROIC3 | |||||||
| Benchmarks | |||||||
| ROIC, Competitors4 | |||||||
| Boeing Co. | |||||||
| Caterpillar Inc. | |||||||
| Eaton Corp. plc | |||||||
| GE Aerospace | |||||||
| Honeywell International Inc. | |||||||
| Lockheed Martin Corp. | |||||||
| RTX Corp. | |||||||
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 NOPAT. See details »
2 Invested capital. See details »
3 2023 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT experienced significant fluctuations over the analyzed period. It started at 2,175 million USD in 2018 and showed a slight decrease to 2,126 million USD in 2019. A sharp decline occurred in 2020, dropping dramatically to 448 million USD, which could be indicative of extraordinary circumstances affecting profitability. The NOPAT recovered substantially in the following years, rising to 2,084 million USD in 2021, then slightly decreasing to 1,860 million USD in 2022, and modestly increasing to 1,892 million USD in 2023. Overall, the trajectory reveals a recovery trend after a severe downturn in 2020.
- Invested Capital
- Invested capital demonstrated a gradual downward trend from 2018 through 2020. It decreased from 35,173 million USD in 2018 to 29,283 million USD in 2020. From 2020 to 2023, the invested capital remained relatively stable, showing only minor fluctuations around the 29,300 million USD mark. This stabilization suggests a consolidation phase or controlled capital allocation following the initial reduction.
- Return on Invested Capital (ROIC)
- The ROIC followed a pattern consistent with the NOPAT trends, highlighting operational efficiency relative to invested capital. It began at 6.18% in 2018, increased slightly to 6.8% in 2019, then plunged precipitously to 1.53% in 2020, reflecting the impact of the reduced operating profit. Subsequently, ROIC rebounded to 7.1% in 2021, slightly declined to 6.31% in 2022, and edged up to 6.42% in 2023. The resurgence after 2020 indicates improved capital utilization and profitability recovery, though it has not substantially surpassed pre-2019 levels.
Decomposition of ROIC
Johnson Controls International plc, decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Sep 30, 2023 | = | × | × | ||||
| Sep 30, 2022 | = | × | × | ||||
| Sep 30, 2021 | = | × | × | ||||
| Sep 30, 2020 | = | × | × | ||||
| Sep 30, 2019 | = | × | × | ||||
| Sep 30, 2018 | = | × | × |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
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 downward trend from 10.76% in 2018 to a low of 5.03% in 2020, indicating a reduction in operational profitability during that period. However, a significant recovery occurred in 2021, with the margin rising sharply to 12.34%, the highest within the observed timeframe. Subsequently, the margin declined to 7.94% in 2022 before a slight increase to 8.48% in 2023, suggesting some stabilization but remaining below the peak level of 2021.
- Turnover of Capital (TO)
- The turnover of capital ratio saw a gradual decline from 0.89 in 2018 to 0.76 in 2020, reflecting a decrease in asset utilization efficiency. A modest recovery followed from 2021 onwards, with the ratio increasing to 0.92 by 2023, surpassing the 2018 figure. This improvement suggests enhanced effectiveness in generating revenue from invested capital in recent years.
- Effective Cash Tax Rate (CTR) – inverse metric (1 – CTR)
- There was notable volatility in the effective cash tax rate, as represented by the inverse measure (1 – CTR). The ratio peaked at an unusually high 161.09% in 2019, indicating significant irregularities or one-off tax-related items during that year. The rate sharply dropped to 39.88% in 2020, followed by fluctuations between 70.76% and 92.14% from 2021 to 2022. By 2023, the ratio settled at 82.72%, suggesting a return to a more typical, albeit still variable, effective tax burden relative to earnings.
- Return on Invested Capital (ROIC)
- The return on invested capital showed a relatively stable trend from 2018 to 2019, increasing slightly from 6.18% to 6.8%. A significant decline occurred in 2020, dropping sharply to 1.53%, possibly reflective of the operational and financial challenges faced during that period. Recovery started in 2021 with a rise to 7.1%, followed by a slight decline to 6.31% in 2022 and a marginal increase to 6.42% in 2023. The figures indicate a rebound toward pre-2020 performance levels, although not a full restoration of prior returns.
Operating Profit Margin (OPM)
Johnson Controls International plc, OPM calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | |||||||
| Add: Cash operating taxes2 | |||||||
| Net operating profit before taxes (NOPBT) | |||||||
| Net sales | |||||||
| Add: Increase (decrease) in deferred revenue | |||||||
| Adjusted net sales | |||||||
| Profitability Ratio | |||||||
| OPM3 | |||||||
| Benchmarks | |||||||
| OPM, Competitors4 | |||||||
| Boeing Co. | |||||||
| Caterpillar Inc. | |||||||
| Eaton Corp. plc | |||||||
| GE Aerospace | |||||||
| Honeywell International Inc. | |||||||
| Lockheed Martin Corp. | |||||||
| RTX Corp. | |||||||
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2023 Calculation
OPM = 100 × NOPBT ÷ Adjusted net sales
= 100 × ÷ =
4 Click competitor name to see calculations.
- Net Operating Profit Before Taxes (NOPBT)
- The net operating profit before taxes experienced a significant decline from 2018 to 2020, dropping from 3,385 million USD in 2018 to 1,124 million USD in 2020. This was followed by a strong recovery in 2021, reaching 2,946 million USD. However, the profits declined again in 2022 to 2,019 million USD, before slightly increasing to 2,287 million USD in 2023. Overall, there is a notable volatility in NOPBT during this period with a partial recovery after the low in 2020.
- Adjusted Net Sales
- Adjusted net sales showed a decreasing trend from 31,447 million USD in 2018 to a low of 22,345 million USD in 2020. Following this, there was a gradual increase over the next three years, rising to 26,985 million USD by 2023. This indicates an initial significant reduction in sales but a steady recovery and growth trend from 2020 onwards.
- Operating Profit Margin (OPM)
- The operating profit margin followed a pattern similar to NOPBT, with a sharp decline from 10.76% in 2018 to a low of 5.03% in 2020. A strong rebound occurred in 2021, with the margin increasing to 12.34%, which is the highest point in the period analyzed. Subsequently, the margin decreased to 7.94% in 2022 and showed a slight improvement to 8.48% in 2023. The fluctuations suggest challenges affecting profitability, with a notable recovery in 2021 and some stabilization thereafter.
- Summary of Trends
- The data reveals that the company faced significant operational and sales challenges between 2018 and 2020, resulting in a sharp decline in profit and margins. From 2020 onwards, an overall recovery trend is visible in both sales and profitability metrics, although the levels have not returned to those seen in 2018. The most pronounced improvement occurred in 2021, while subsequent years indicate some variability but maintain better performance levels than the low point in 2020. The combination of these metrics suggests an environment of recovery with ongoing volatility in profitability and sales performance.
Turnover of Capital (TO)
Johnson Controls International plc, TO calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net sales | |||||||
| Add: Increase (decrease) in deferred revenue | |||||||
| Adjusted net sales | |||||||
| Invested capital1 | |||||||
| Efficiency Ratio | |||||||
| TO2 | |||||||
| Benchmarks | |||||||
| TO, Competitors3 | |||||||
| Boeing Co. | |||||||
| Caterpillar Inc. | |||||||
| Eaton Corp. plc | |||||||
| GE Aerospace | |||||||
| Honeywell International Inc. | |||||||
| Lockheed Martin Corp. | |||||||
| RTX Corp. | |||||||
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 Invested capital. See details »
2 2023 Calculation
TO = Adjusted net sales ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
- Adjusted Net Sales
- Adjusted net sales demonstrated a declining trend from 2018 to 2020, dropping from 31,447 million USD in 2018 to 22,345 million USD in 2020. A recovery phase followed, with sales increasing steadily to reach 26,985 million USD by 2023. This suggests a period of contraction followed by gradual growth in sales revenue.
- Invested Capital
- Invested capital showed a decreasing trend from 2018 through 2020, reducing from 35,173 million USD to 29,283 million USD. From 2020 onward, it stabilized around the 29,300 million USD mark, with minor fluctuations observed through to 2023. This stability in invested capital may reflect a strategic decision to maintain a consistent capital base post-2020.
- Turnover of Capital (TO)
- The turnover of capital ratio declined from 0.89 in 2018 to a low of 0.76 in 2020, indicating reduced efficiency in utilizing capital during this period. Subsequently, the ratio increased progressively to 0.92 by 2023, surpassing the 2018 level. This improvement implies enhanced capital usage effectiveness in recent years, contributing positively to operational performance.
- Overall Insights
- The data reveals that after a downturn phase culminating in 2020, both sales and capital turnover exhibited recovery and improvement trends through 2023, while invested capital was maintained at a relatively stable level post-2020. The growing turnover of capital coupled with increasing net sales points toward improved operational efficiency and possibly better asset management strategies in the latest periods analyzed.
Effective Cash Tax Rate (CTR)
Johnson Controls International plc, CTR calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| 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 | |||||||
| Boeing Co. | |||||||
| Caterpillar Inc. | |||||||
| Eaton Corp. plc | |||||||
| GE Aerospace | |||||||
| Honeywell International Inc. | |||||||
| Lockheed Martin Corp. | |||||||
| RTX Corp. | |||||||
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2023 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × ÷ =
4 Click competitor name to see calculations.
- Cash Operating Taxes
- The cash operating taxes exhibit significant variability across the analyzed years. Starting with a positive value of 1210 million USD in 2018, the figure sharply declined to a negative 806 million USD in 2019, indicating a tax benefit or refund during that period. In 2020, it reverted to a positive 675 million USD and gradually increased in 2021 to 861 million USD. However, 2022 saw a substantial decrease to 159 million USD, followed by a moderate increase to 395 million USD in 2023. This volatility suggests fluctuations in taxable income or changes in tax regulations affecting payable taxes.
- Net Operating Profit Before Taxes (NOPBT)
- Net operating profit before taxes experienced notable fluctuations over the period. After a strong result of 3385 million USD in 2018, NOPBT drastically decreased to 1320 million USD in 2019 and slightly declined further to 1124 million USD in 2020. The year 2021 marked a significant recovery with NOPBT rebounding to 2946 million USD. This was followed by a decrease to 2019 million USD in 2022 and a moderate increase to 2287 million USD in 2023. The trend indicates a period of instability with recovery phases, reflecting changing business conditions or operational efficiencies.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate shows considerable fluctuations and does not follow a consistent upward or downward pattern. It started at 35.74% in 2018, dropped sharply to a negative rate of -61.09% in 2019, implying a tax benefit exceeding operating profits that year. In 2020, the tax rate rose to 60.12%, suggesting a higher tax burden relative to profits. The rate then decreased to 29.24% in 2021, followed by a significant drop to 7.86% in 2022 and a slight increase to 17.28% in 2023. These variations highlight inconsistent tax liability, which may be related to changes in profitability, tax laws, or tax planning strategies.