Stock Analysis on Net

Time Warner Inc. (NYSE:TWX)

This company has been moved to the archive! The financial data has not been updated since April 26, 2018.

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)

Time Warner Inc., ROIC calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 5,040 4,943 4,751 5,167 5,150
Invested capital2 57,150 54,961 53,163 52,455 56,262
Performance Ratio
ROIC3 8.82% 8.99% 8.94% 9.85% 9.15%
Benchmarks
ROIC, Competitors4
Alphabet Inc.
Comcast Corp.
Meta Platforms Inc.
Netflix Inc.
Walt Disney Co.

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

1 NOPAT. See details »

2 Invested capital. See details »

3 2017 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 5,040 ÷ 57,150 = 8.82%

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. Time Warner Inc. ROIC improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

Decomposition of ROIC

Time Warner Inc., decomposition of ROIC

Microsoft Excel
ROIC = OPM1 × TO2 × 1 – CTR3
Dec 31, 2017 8.82% = 22.67% × 0.55 × 70.80%
Dec 31, 2016 8.99% = 21.80% × 0.53 × 77.14%
Dec 31, 2015 8.94% = 23.08% × 0.53 × 73.00%
Dec 31, 2014 9.85% = 22.72% × 0.52 × 83.13%
Dec 31, 2013 9.15% = 22.16% × 0.53 × 78.13%

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

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 2017 year is the increase in effective cash tax rate (CTR).


Operating Profit Margin (OPM)

Time Warner Inc., OPM calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 5,040 4,943 4,751 5,167 5,150
Add: Cash operating taxes2 2,078 1,465 1,757 1,048 1,442
Net operating profit before taxes (NOPBT) 7,118 6,409 6,508 6,216 6,591
 
Revenues 31,271 29,318 28,118 27,359 29,795
Add: Increase (decrease) in deferred revenue 129 82 74 1 (57)
Adjusted revenues 31,400 29,400 28,192 27,360 29,738
Profitability Ratio
OPM3 22.67% 21.80% 23.08% 22.72% 22.16%
Benchmarks
OPM, Competitors4
Alphabet Inc.
Comcast Corp.
Meta Platforms Inc.
Netflix Inc.
Walt Disney Co.

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2017 Calculation
OPM = 100 × NOPBT ÷ Adjusted revenues
= 100 × 7,118 ÷ 31,400 = 22.67%

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. Time Warner Inc. OPM deteriorated from 2015 to 2016 but then improved from 2016 to 2017 not reaching 2015 level.

Turnover of Capital (TO)

Time Warner Inc., TO calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (US$ in millions)
Revenues 31,271 29,318 28,118 27,359 29,795
Add: Increase (decrease) in deferred revenue 129 82 74 1 (57)
Adjusted revenues 31,400 29,400 28,192 27,360 29,738
 
Invested capital1 57,150 54,961 53,163 52,455 56,262
Efficiency Ratio
TO2 0.55 0.53 0.53 0.52 0.53
Benchmarks
TO, Competitors3
Alphabet Inc.
Comcast Corp.
Meta Platforms Inc.
Netflix Inc.
Walt Disney Co.

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

1 Invested capital. See details »

2 2017 Calculation
TO = Adjusted revenues ÷ Invested capital
= 31,400 ÷ 57,150 = 0.55

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. Time Warner Inc. TO improved from 2015 to 2016 and from 2016 to 2017.

Effective Cash Tax Rate (CTR)

Time Warner Inc., CTR calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 5,040 4,943 4,751 5,167 5,150
Add: Cash operating taxes2 2,078 1,465 1,757 1,048 1,442
Net operating profit before taxes (NOPBT) 7,118 6,409 6,508 6,216 6,591
Tax Rate
CTR3 29.20% 22.86% 27.00% 16.87% 21.87%
Benchmarks
CTR, Competitors4
Alphabet Inc.
Comcast Corp.
Meta Platforms Inc.
Netflix Inc.
Walt Disney Co.

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2017 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 2,078 ÷ 7,118 = 29.20%

4 Click competitor name to see calculations.

Tax rate Description The company
CTR Effective cash tax rate on operating income. Time Warner Inc. CTR decreased from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.