Archer-Daniels-Midland Company (ADM)
Return on total capital
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 2,876,000 | 2,929,000 | 3,646,000 | 4,321,000 | 4,814,000 | 5,259,000 | 5,260,000 | 5,180,000 | 4,710,000 | 4,456,000 | 4,062,000 | 3,417,000 | 3,148,000 | 2,673,000 | 2,480,000 | 2,303,000 | 1,798,000 | 1,621,000 | 1,710,000 | 1,616,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 22,168,000 | 21,974,000 | 22,148,000 | 23,219,000 | 24,132,000 | 25,228,000 | 24,939,000 | 24,860,000 | 24,284,000 | 23,997,000 | 24,393,000 | 23,722,000 | 22,477,000 | 21,969,000 | 21,582,000 | 20,841,000 | 20,000,000 | 19,322,000 | 19,293,000 | 18,952,000 |
| Return on total capital | 12.97% | 13.33% | 16.46% | 18.61% | 19.95% | 20.85% | 21.09% | 20.84% | 19.40% | 18.57% | 16.65% | 14.40% | 14.01% | 12.17% | 11.49% | 11.05% | 8.99% | 8.39% | 8.86% | 8.53% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $2,876,000K ÷ ($—K + $22,168,000K)
= 12.97%
The return on total capital for Archer-Daniels-Midland Company has shown a fluctuating trend over the past few years. Starting at 8.53% as of March 31, 2020, the return gradually increased, reaching its peak at 21.09% as of June 30, 2023. This significant improvement indicates that the company was able to generate higher returns relative to its total capital deployed during this period.
However, after reaching the peak in mid-2023, the return on total capital started to decline, dropping to 12.97% by December 31, 2024. This downward trend suggests that the company may have faced challenges in maintaining the same level of profitability relative to its capital base in the later periods.
It is important for investors and stakeholders to closely monitor the return on total capital as it provides insights into how effectively the company is utilizing its resources to generate profits. Understanding the factors driving the changes in this ratio can help in evaluating the company's operational performance and financial health.
Peer comparison
Dec 31, 2024