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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e.l.f. Beauty, Inc. pages available for free this week:
- Balance Sheet: Assets
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Geographic Areas
- Common Stock Valuation Ratios
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Net Profit Margin since 2016
- Return on Equity (ROE) since 2016
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Return on Invested Capital (ROIC)
e.l.f. Beauty, Inc., ROIC calculation, comparison to benchmarks
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| ROIC3 | ||||||
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| Procter & Gamble Co. | ||||||
Based on: 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).
1 NOPAT. See details »
2 Invested capital. See details »
3 2024 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 periods. It started at 26,428 thousand USD in 2020, dropped sharply to 618 thousand USD in 2021, then rebounded to 20,327 thousand USD in 2022. This upward trend continued with a more substantial increase to 57,046 thousand USD in 2023, and it peaked at 132,182 thousand USD in 2024, indicating a strong recovery and growth in operating profitability.
- Invested Capital
- Invested capital showed a steady increase throughout the period. It rose from 418,026 thousand USD in 2020 to 434,062 thousand USD in 2021, followed by incremental growth to 439,123 thousand USD in 2022, and further to 496,463 thousand USD in 2023. The most pronounced increase occurred in 2024, where invested capital nearly doubled to 936,268 thousand USD, suggesting a significant expansion in the company's asset base or capital commitments.
- Return on Invested Capital (ROIC)
- ROIC closely mirrored the volatility observed in NOPAT, reflecting changes in operating efficiency and capital utilization. It decreased dramatically from 6.32% in 2020 to 0.14% in 2021, then recovered to 4.63% in 2022. The metric improved substantially in 2023, reaching 11.49%, and further increased to 14.12% in 2024, indicating enhanced profitability relative to invested capital over time.
- Overall Analysis
- The company demonstrated notable volatility in operating profit in the early part of the period, likely reflecting operational challenges or external factors in 2021. However, subsequent years showed strong recovery and growth, both in absolute profitability and relative returns on capital. The steady and then rapid increase in invested capital, especially in 2024, suggests strategic investment or expansion initiatives, which appear to be yielding higher returns. The improvement in ROIC in the latest periods indicates that the company is generating greater value from its invested capital despite the increased asset base.
Decomposition of ROIC
e.l.f. Beauty, Inc., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Mar 31, 2024 | = | × | × | ||||
| Mar 31, 2023 | = | × | × | ||||
| Mar 31, 2022 | = | × | × | ||||
| Mar 31, 2021 | = | × | × | ||||
| Mar 31, 2020 | = | × | × |
Based on: 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).
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 demonstrated a volatile trend over the five-year period. Starting at 11.17% in 2020, it sharply declined to a low of 2.41% in 2021. Subsequently, it recovered steadily, rising to 7.22% in 2022 and further increasing to 11.49% in 2023. The margin continued its upward trajectory, reaching 14.7% in 2024. This pattern indicates initial operational challenges or increased costs in 2021, followed by improving operational efficiency or enhanced profitability in the ensuing years.
- Turnover of Capital (TO)
- The turnover of capital ratio showed a consistent upward trend from 2020 through 2023, increasing from 0.68 in 2020 to a peak of 1.17 in 2023. However, there was a slight decline to 1.09 in 2024. This overall increase suggests improved asset utilization and more efficient generation of sales from invested capital until 2023, with a minor decrease in efficiency or asset usage efficiency in the latest year.
- 1 – Effective Cash Tax Rate (CTR)
- The inverse effective cash tax rate exhibited considerable fluctuation. Beginning at a high level of 83.62% in 2020, it dropped drastically to 8.07% in 2021, indicating a significant increase in the effective cash tax rate during that year. Thereafter, the metric experienced a sharp rebound to 71.79% in 2022 and continued to increase to 85.78% in 2023, further peaking at 87.79% in 2024. The fluctuations may reflect changes in tax policies, tax planning strategies, or variations in tax expenses relative to earnings across these years.
- Return on Invested Capital (ROIC)
- Return on invested capital followed a pattern similar to operating profit margin. It initiated at 6.32% in 2020, then significantly dropped to 0.14% in 2021, indicating near breakeven or minimal returns on capital invested. After 2021, ROIC showed marked improvement, rising to 4.63% in 2022 and then more than doubling to 11.49% in 2023. In 2024, it increased further to 14.12%, suggesting enhanced capital efficiency and profitability in recent years.
- Summary Insights
- Overall, the data reveal a period of operational and financial challenge in 2021, characterized by the lowest operating profit margin and ROIC, coupled with a substantially elevated effective cash tax rate. From 2022 onwards, there is a clear recovery and strengthening trend in profitability metrics and capital efficiency, culminating in robust operating margins and returns on invested capital by 2024. Despite a minor decline in capital turnover in the final year, the general trend indicates improving financial performance and efficiency after overcoming difficulties in 2021.
Operating Profit Margin (OPM)
e.l.f. Beauty, Inc., OPM calculation, comparison to benchmarks
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Net sales | ||||||
| Profitability Ratio | ||||||
| OPM3 | ||||||
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| Procter & Gamble Co. | ||||||
Based on: 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2024 Calculation
OPM = 100 × NOPBT ÷ Net sales
= 100 × ÷ =
4 Click competitor name to see calculations.
- Net operating profit before taxes (NOPBT)
- The net operating profit before taxes exhibited significant fluctuations over the observed period. Initially, it decreased sharply from 31,606 thousand USD in 2020 to 7,663 thousand USD in 2021, indicating a period of reduced profitability. However, a recovery phase is evident thereafter, with NOPBT increasing to 28,316 thousand USD in 2022, followed by a more pronounced growth to 66,500 thousand USD in 2023. The trend culminates in a substantial rise to 150,565 thousand USD by 2024, suggesting improved operational efficiency and strong profit-generating capacity.
- Net sales
- Net sales demonstrated a consistent and robust upward trajectory throughout the period. Starting at 282,851 thousand USD in 2020, sales increased modestly to 318,110 thousand USD in 2021. From that point forward, there was an accelerated growth pattern, with sales rising to 392,155 thousand USD in 2022, 578,844 thousand USD in 2023, and reaching over one billion USD (1,023,932 thousand) in 2024. This consistent growth highlights strong market demand and effective sales strategies.
- Operating profit margin (OPM)
- The operating profit margin showed notable variability across the years. It began at 11.17% in 2020 and saw a marked decline to 2.41% in 2021, reflecting diminished operational efficiency or increased costs relative to sales during that year. Subsequently, the margin improved steadily to 7.22% in 2022, then improved further to 11.49% in 2023, and reached a peak of 14.7% by 2024. This upward trend in margin indicates enhanced cost management and greater profitability per unit of sales over time.
Turnover of Capital (TO)
e.l.f. Beauty, Inc., TO calculation, comparison to benchmarks
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| Procter & Gamble Co. | ||||||
Based on: 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).
1 Invested capital. See details »
2 2024 Calculation
TO = Net sales ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
- Net Sales
- Net sales exhibited consistent growth throughout the five-year period. Starting at approximately $282.9 million in 2020, sales increased steadily each year, reaching over $1 billion by 2024. The most significant year-over-year increase occurred between 2023 and 2024, where net sales nearly doubled, indicating a strong acceleration in revenue generation.
- Invested Capital
- Invested capital showed a moderate upward trend from 2020 to 2023, increasing from about $418.0 million to approximately $496.5 million. However, there was a substantial surge in invested capital in 2024, nearly doubling from the previous year to roughly $936.3 million. This sharp rise suggests significant additional investment or asset acquisition in the most recent period.
- Turnover of Capital (TO)
- The turnover of capital ratio improved over the initial four years, rising from 0.68 in 2020 to a peak of 1.17 in 2023, which reflects increasing efficiency in utilizing invested capital to generate sales. However, in 2024, the ratio declined slightly to 1.09, indicating that while sales grew substantially, invested capital increased at a faster rate, slightly reducing capital efficiency compared to the previous year.
Effective Cash Tax Rate (CTR)
e.l.f. Beauty, Inc., CTR calculation, comparison to benchmarks
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Tax Rate | ||||||
| CTR3 | ||||||
| Benchmarks | ||||||
| CTR, Competitors4 | ||||||
| Procter & Gamble Co. | ||||||
Based on: 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2024 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × ÷ =
4 Click competitor name to see calculations.
- Cash Operating Taxes
- The cash operating taxes demonstrate an overall increasing trend from 2020 to 2024. Starting at $5,178 thousand in 2020, the figure increased gradually each year, reaching $18,383 thousand by 2024. Notably, the largest year-over-year increase occurred between 2023 and 2024, indicating a significant rise in tax payments during the latest period.
- Net Operating Profit Before Taxes (NOPBT)
- The net operating profit before taxes exhibits some volatility throughout the five-year period. It began at $31,606 thousand in 2020, sharply dropped to $7,663 thousand in 2021, then rebounded to $28,316 thousand in 2022. The upward trend continued more substantially in 2023, reaching $66,500 thousand, and surged further to $150,565 thousand in 2024. This rebound and accelerated growth suggest improved operational performance and profitability over the last three years.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate shows high variability, starting at 16.38% in 2020 and dramatically increasing to 91.93% in 2021, indicating an unusually high tax burden that year relative to operating profits. Subsequently, the tax rate declined sharply to 28.21% in 2022 and continued to decrease in 2023 and 2024, reaching 14.22% and 12.21%, respectively. This downward trend in tax rate over recent years suggests improved tax efficiency or changes in tax strategy impacting the effective tax burden.
- Overall Insights
- The data reflects a recovery and strong growth in operating profitability following a dip in 2021. Alongside this growing profitability, cash operating taxes have increased but at a less aggressive rate than profits, supported by a declining effective tax rate in the latter years. The significant fluctuations in tax rate in the early years may have been influenced by temporary factors or irregularities, but the recent steady decline indicates stabilization. Together, these trends suggest an improving financial efficiency and possibly favorable tax environments or planning strategies implemented in recent periods.