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)
Waste Management Inc., ROIC calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | 2,064) | 2,018) | 2,119) | 2,286) | 1,952) | |
| Invested capital2 | 22,932) | 23,729) | 22,640) | 18,435) | 17,686) | |
| Performance Ratio | ||||||
| ROIC3 | 9.00% | 8.50% | 9.36% | 12.40% | 11.04% | |
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| Cintas Corp. | 16.72% | 15.00% | 15.49% | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 NOPAT. See details »
2 Invested capital. See details »
3 2021 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 2,064 ÷ 22,932 = 9.00%
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. | Waste Management Inc. ROIC deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level. |
Decomposition of ROIC
Waste Management Inc., decomposition of ROIC
Based on: 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), 10-K (reporting date: 2017-12-31).
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 increase in return on invested capital (ROIC) over 2021 year is the increase in efficiency measured by turnover of capital (TO) ratio.
Operating Profit Margin (OPM)
Waste Management Inc., OPM calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | 2,064) | 2,018) | 2,119) | 2,286) | 1,952) | |
| Add: Cash operating taxes2 | 689) | 324) | 424) | 511) | 626) | |
| Net operating profit before taxes (NOPBT) | 2,753) | 2,342) | 2,543) | 2,797) | 2,578) | |
| Operating revenues | 17,931) | 15,218) | 15,455) | 14,914) | 14,485) | |
| Add: Increase (decrease) in deferred revenues | 32) | 5) | 12) | 19) | 10) | |
| Adjusted operating revenues | 17,963) | 15,223) | 15,467) | 14,933) | 14,495) | |
| Profitability Ratio | ||||||
| OPM3 | 15.32% | 15.38% | 16.44% | 18.73% | 17.78% | |
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| Cintas Corp. | 19.20% | 16.82% | 17.62% | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2021 Calculation
OPM = 100 × NOPBT ÷ Adjusted operating revenues
= 100 × 2,753 ÷ 17,963 = 15.32%
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. | Waste Management Inc. OPM deteriorated from 2019 to 2020 and from 2020 to 2021. |
Turnover of Capital (TO)
Waste Management Inc., TO calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating revenues | 17,931) | 15,218) | 15,455) | 14,914) | 14,485) | |
| Add: Increase (decrease) in deferred revenues | 32) | 5) | 12) | 19) | 10) | |
| Adjusted operating revenues | 17,963) | 15,223) | 15,467) | 14,933) | 14,495) | |
| Invested capital1 | 22,932) | 23,729) | 22,640) | 18,435) | 17,686) | |
| Efficiency Ratio | ||||||
| TO2 | 0.78 | 0.64 | 0.68 | 0.81 | 0.82 | |
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| Cintas Corp. | 1.06 | 1.09 | 1.06 | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 Invested capital. See details »
2 2021 Calculation
TO = Adjusted operating revenues ÷ Invested capital
= 17,963 ÷ 22,932 = 0.78
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. | Waste Management Inc. TO deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level. |
Effective Cash Tax Rate (CTR)
Waste Management Inc., CTR calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | 2,064) | 2,018) | 2,119) | 2,286) | 1,952) | |
| Add: Cash operating taxes2 | 689) | 324) | 424) | 511) | 626) | |
| Net operating profit before taxes (NOPBT) | 2,753) | 2,342) | 2,543) | 2,797) | 2,578) | |
| Tax Rate | ||||||
| CTR3 | 25.02% | 13.84% | 16.66% | 18.26% | 24.28% | |
| Benchmarks | ||||||
| CTR, Competitors4 | ||||||
| Cintas Corp. | 17.58% | 18.30% | 17.10% | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2021 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 689 ÷ 2,753 = 25.02%
4 Click competitor name to see calculations.
| Tax rate | Description | The company |
|---|---|---|
| CTR | Effective cash tax rate on operating income. | Waste Management Inc. CTR decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level. |