Intel Corporation (INTC) Return on Invested Capital (ROIC)

Intel Corporation

INTC (NASDAQ)

(%)

Models
Intel Corporation Return on Invested Capital (ROIC)

# Render description block
model.render_description({
    "data": r"""
### Return on Invested Capital (ROIC)

The return on capital or invested capital in a business attempts to measure the return earned on capital invested in an investment.

> Read more on [Aswath Damodaran - Return Measures PDF](https://pages.stern.nyu.edu/~adamodar/pdfiles/papers/returnmeasures.pdf)

### ROIC Formula

`Return on Invested Capital (ROIC)` = `Net Operating Profit After Tax (NOPAT)` / `Invested Capital`

The Net Operating Profit After Tax (NOPAT) is calculated using the reported Earnings Before Interest and Taxes (EBIT) or Operating Income on the income statement adjusted for the tax liability.

`Net Operating Profit After Tax (NOPAT)` = `Operating Income` * (1 - `Income Tax Rate`)

There are two ways to calculate invested capital: One looks at the company's assets, and another looks at its financing from debt and equity. In this model, we are using the financing based approach.

`Invested Capital` = `Total Stockholders Equity` + `Total Debt` - `Cash and Short Term Investments`

We then adjust `Invested Capital` and `Net Operating Profit After Tax (NOPAT)`  for **capitalized R&D expenses**.
""",
    "properties": {
        "width": "responsive"
    }
})

# --- Historical Data
data.compute({
    "user:%incomeTaxRate": """
        income:incomeTaxExpense / income:incomeBeforeTax
    """,
    "user:netOperatingProfitAfterTaxNopat": """
        income:operatingIncome * (1 - user:%incomeTaxRate)
    """,
    "user:investedCapital": """
        balance:totalStockholdersEquity
        + balance:totalDebt
        - balance:cashAndShortTermInvestments
    """,
    "user:%returnOnInvestedCapitalRoic": """
        user:netOperatingProfitAfterTaxNopat / user:investedCapital
    """,
}, forecast=0, timeseries="annual")

model.render_table({
    "timeseries": "annual",
    "data": {
        "user:%incomeTaxRate": "Income Tax Rate",
        "income:operatingIncome": "Operating Income",
        "user:netOperatingProfitAfterTaxNopat": "Net Operating Profit After Tax (NOPAT)",
        "balance:totalStockholdersEquity": "Total Stockholders Equity",
        "balance:totalDebt": "+ Total Debt",
        "balance:cashAndShortTermInvestments": "- Cash and Short Term Investments",
        "user:investedCapital": "= Invested Capital",
        "user:%returnOnInvestedCapitalRoic": "Return on Invested Capital (ROIC)",
    },
    "start": -5,
    "end": 0,
    "properties": {
        "title": "Historical Data",
        "order": "descending",
        "number_format": "M",
        "include_ltm": True,
        "display_averages": False,
        "width": "responsive"
    }
})

# --- R&D Amortization
assumptions.set({
    "timeseries": "annual",
    "data": {
        "#rDAmortizationYears": """
            5
        """,
    },
    "titles": {
        "#rDAmortizationYears": "R&D Amortization Years",
    },
    "properties": {
        "width": "responsive",
        "title": "R&D Amortization",
        "id": "component-10",
        "bindTo": None
    },
    "descriptions": {
        "#rDAmortizationYears": r"""
Represents the assumed useful life (in years) over which R&D spending is capitalized and amortized to form a **“research asset.”**

A longer period increases the capitalized R&D asset (raising invested capital) and typically lowers adjusted ROIC; a shorter period does the opposite.
        """,
    }
})

# --- R&D Amortization Calculations
data.compute({
    "user:#unamortizedRDRatio": """
        (0 > time:index >= -assumption:#rDAmortizationYears) 
        * (assumption:#rDAmortizationYears + time:index + 1) / assumption:#rDAmortizationYears
    """,
    "user:unamortizedRDValue": """
        income:researchAndDevelopmentExpenses * user:#unamortizedRDRatio
    """,
    "user:#rDAmortizationRatio": """
        (0 > 1 + time:index >= - assumption:#rDAmortizationYears) * 1 / assumption:#rDAmortizationYears
    """,
    "user:rDAmortizationThisYear": """
        income:researchAndDevelopmentExpenses * user:#rDAmortizationRatio
    """,
}, forecast=0, timeseries="annual")

model.render_table({
    "timeseries": "annual",
    "data": {
        "income:researchAndDevelopmentExpenses": "Research and Development Expenses",
        "user:#unamortizedRDRatio": "Unamortized R&D Ratio",
        "user:unamortizedRDValue": "Unamortized R&D Value",
        "user:#rDAmortizationRatio": "R&D Amortization Ratio",
        "user:rDAmortizationThisYear": "R&D Amortization This Year",
    },
    "start": data.get("""
        -assumption:#rDAmortizationYears - 1
    """),
    "end": 0,
    "properties": {
        "title": "R&D Amortization Calculations",
        "order": "descending",
        "number_format": "M",
        "include_ltm": False,
        "display_averages": False,
        "width": "responsive"
    }
})

# Render description block
model.render_description({
    "data": r"""
### Capitalizing R&D Expenses

As per prof. Aswath Damodaran's paper:
> "Research expenses, notwithstanding the uncertainty about future benefits, should be capitalized."

Capitalizing R&D expenses treats R&D as an intangible investment. We estimate a “research asset” as the sum of unamortized R&D based on the selected amortization period.

`Value of the Research Asset` = Sum of `Unamortized R&D Value`

We also record annual amortization of that asset.

`Amortization of Research Asset` = Sum of `R&D Amortization This Year`

We then adjust profitability and capital to reflect this treatment:

`ROIC Adjusted for Capitalized R&D` = `Adjusted NOPAT` / `Adjusted Invested Capital`
""",
    "properties": {
        "width": "responsive"
    }
})

# --- Adjusted ROIC Calculation
data.compute_results({
    "amortizationOfResearchAsset": """
         function:sum(start=-assumption:#rDAmortizationYears - 1, end=-1):user:rDAmortizationThisYear
    """,
    "adjustedNopat": """
        user:netOperatingProfitAfterTaxNopat
        + income:researchAndDevelopmentExpenses
        - result:amortizationOfResearchAsset
    """,
    "valueOfTheResearchAsset": """
         function:sum(start=-assumption:#rDAmortizationYears - 1, end=-1):user:unamortizedRDValue 
    """,
    "adjustedStockholdersEquity": """
        balance:totalStockholdersEquity + result:valueOfTheResearchAsset
    """,
    "adjustedInvestedCapital": """
        result:adjustedStockholdersEquity
        + balance:totalDebt
        - balance:cashAndShortTermInvestments
    """,
    "%roicAdjustedForCapitalizedRD": """
        result:adjustedNopat / result:adjustedInvestedCapital
    """,
}, timeseries="annual")

model.render_results({
    "timeseries": "annual",
    "data": {
        "user:netOperatingProfitAfterTaxNopat": {
            "label": "Net Operating Profit After Tax (NOPAT)",
            "type": "$"
        },
        "income:researchAndDevelopmentExpenses": {
            "label": "+ Research and Development Expenses",
            "type": "$"
        },
        "result:amortizationOfResearchAsset": {
            "label": "- Amortization of Research Asset",
            "type": "$"
        },
        "result:adjustedNopat": {
            "label": "= Adjusted NOPAT",
            "type": "$"
        },
        "balance:totalStockholdersEquity": {
            "label": "Total Stockholders Equity",
            "type": "$"
        },
        "result:valueOfTheResearchAsset": {
            "label": "+ Value of the Research Asset",
            "type": "$"
        },
        "result:adjustedStockholdersEquity": {
            "label": "= Adjusted Stockholders Equity",
            "type": "$"
        },
        "balance:totalDebt": {
            "label": "+ Total Debt",
            "type": "$"
        },
        "balance:cashAndShortTermInvestments": {
            "label": "- Cash and Short Term Investments",
            "type": "$"
        },
        "result:adjustedInvestedCapital": {
            "label": "= Adjusted Invested Capital",
            "type": "$"
        },
        "result:%roicAdjustedForCapitalizedRD": {
            "label": "ROIC Adjusted for Capitalized R&D",
            "type": "%"
        },
    },
    "properties": {
        "title": "Adjusted ROIC Calculation",
        "width": "responsive",
        "hidden_keys": []
    }
})

# --- Return on Invested Capital
model.set_final_value({
    "value": data.get("""
        user:%returnOnInvestedCapitalRoic
    """, timeseries="annual"),
    "units": "%",
    "title": "Return on Invested Capital",
    "properties": {
        "width": "full" 
    }
})

Return on Invested Capital

%

* Values are not guaranteed, please do your own
research before making investment decisions.

Return on Invested Capital (ROIC)

The return on capital or invested capital in a business attempts to measure the return earned on capital invested in an investment.

Read more on Aswath Damodaran - Return Measures PDF

ROIC Formula

Return on Invested Capital (ROIC) = Net Operating Profit After Tax (NOPAT) / Invested Capital

The Net Operating Profit After Tax (NOPAT) is calculated using the reported Earnings Before Interest and Taxes (EBIT) or Operating Income on the income statement adjusted for the tax liability.

Net Operating Profit After Tax (NOPAT) = Operating Income * (1 - Income Tax Rate)

There are two ways to calculate invested capital: One looks at the company's assets, and another looks at its financing from debt and equity. In this model, we are using the financing based approach.

Invested Capital = Total Stockholders Equity + Total Debt - Cash and Short Term Investments

We then adjust Invested Capital and Net Operating Profit After Tax (NOPAT) for capitalized R&D expenses.

Historical Data

Monetary values in USD amounts except #	LTM Mar 13	2025 Dec 27	2024 Dec 28	2023 Dec 30	2022 Dec 31	2021 Dec 25
Income Tax Rate	98.33%	98.33%	-71.57%	-119.8%	-3.21%	8.46%
Operating Income	-2,244	-23	-11,678	93	2,334	19,456
Net Operating Profit After Tax (NOPAT)	-37.47	-0.384	-20,036	204.4	2,409	17,811
Total Stockholders Equity	114,281	114,281	99,270	105,590	101,423	95,391
+ Total Debt	46,585	46,585	50,011	49,278	42,051	38,101
- Cash and Short Term Investments	37,416	37,416	22,062	25,034	28,338	29,253
= Invested Capital	123,450	123,450	127,219	129,834	115,136	104,239
Return on Invested Capital (ROIC)	-0.03%	0%	-15.75%	0.157%	2.09%	17.09%

R&D Amortization

R&D Amortization Calculations

Monetary values in USD amounts except #	2025 Dec 27	2024 Dec 28	2023 Dec 30	2022 Dec 31	2021 Dec 25	2020 Dec 26
Research and Development Expenses	13,774	16,546	16,046	17,528	15,190	13,556
Unamortized R&D Ratio	1.0	0.8	0.6	0.4	0.2	0.0
Unamortized R&D Value	13,774	13,237	9,628	7,011	3,038	0
R&D Amortization Ratio	0.0	0.2	0.2	0.2	0.2	0.2
R&D Amortization This Year	0	3,309	3,209	3,506	3,038	2,711

Capitalizing R&D Expenses

As per prof. Aswath Damodaran's paper:

"Research expenses, notwithstanding the uncertainty about future benefits, should be capitalized."

Capitalizing R&D expenses treats R&D as an intangible investment. We estimate a “research asset” as the sum of unamortized R&D based on the selected amortization period.

Value of the Research Asset = Sum of Unamortized R&D Value

We also record annual amortization of that asset.

Amortization of Research Asset = Sum of R&D Amortization This Year

We then adjust profitability and capital to reflect this treatment:

ROIC Adjusted for Capitalized R&D = Adjusted NOPAT / Adjusted Invested Capital

Adjusted ROIC Calculation
Net Operating Profit After Tax (NOPAT)	-37.47 Mil. USD
+ Research and Development Expenses	13.77 Bil. USD
- Amortization of Research Asset	15.77 Bil. USD
= Adjusted NOPAT	-2.04 Bil. USD
Total Stockholders Equity	114.3 Bil. USD
+ Value of the Research Asset	46.69 Bil. USD
= Adjusted Stockholders Equity	161 Bil. USD
+ Total Debt	46.59 Bil. USD
- Cash and Short Term Investments	37.42 Bil. USD
= Adjusted Invested Capital	170.1 Bil. USD
ROIC Adjusted for Capitalized R&D	-1.2%

Return on Invested Capital