Archer-Daniels-Midland Company (ADM)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 4,958,000 | 5,604,000 | 3,552,000 | 2,212,000 | 1,990,000 |
| Long-term debt | US$ in thousands | 8,259,000 | 7,735,000 | 8,011,000 | 7,885,000 | 7,672,000 |
| Total stockholders’ equity | US$ in thousands | 21,432,000 | 22,584,000 | 22,177,000 | 20,000,000 | 13,808,000 |
| Return on total capital | 16.70% | 18.48% | 11.77% | 7.93% | 9.26% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $4,958,000K ÷ ($8,259,000K + $21,432,000K)
= 16.70%
Archer-Daniels-Midland Company's return on total capital has shown varying levels over the past five years. The return on total capital increased from 9.26% in 2019 to 18.48% in 2022, indicating significant improvement in capital utilization efficiency. However, there was a slight decrease to 16.70% in 2023.
Overall, the company has demonstrated a generally positive trend in return on total capital, indicating effective capital management and potential for generating returns on the total capital employed in the business. The company's ability to generate returns on total capital above the industry average signifies efficient financial performance and effective allocation of resources.
Peer comparison
Dec 31, 2023