Abbott Laboratories (ABT)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 7,616,000 | 7,362,000 | 9,113,000 | 9,204,000 | 5,462,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 47,664,000 | 38,603,000 | 36,686,000 | 35,802,000 | 32,784,000 |
| Return on total capital | 15.98% | 19.07% | 24.84% | 25.71% | 16.66% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $7,616,000K ÷ ($—K + $47,664,000K)
= 15.98%
Abbott Laboratories' return on total capital has shown fluctuations over the past five years. In 2020, the return on total capital was 16.66%, indicating that for every dollar of total capital employed, the company generated a return of 16.66 cents. The return improved significantly in 2021 to 25.71%, suggesting improved efficiency in generating profits from its capital base.
In 2022, the return remained relatively high at 24.84%, demonstrating continued strong performance in leveraging its total capital effectively. The return declined slightly in 2023 to 19.07%, possibly due to changes in the business environment or company strategy. By the end of 2024, the return on total capital decreased further to 15.98%, suggesting a potential challenge in maintaining previous levels of profitability relative to its capital.
Overall, Abbott Laboratories has shown a generally positive trend in its return on total capital, with some fluctuations in recent years. It is important for the company to monitor and manage its capital efficiency to sustain long-term profitability and growth.
Peer comparison
Dec 31, 2024