Albemarle Corp (ALB)

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	-1,776,540	251,881	2,470,060	798,434	505,812
Long-term debt	US$ in thousands	3,118,140	3,541,000	3,214,970	2,004,320	2,767,380
Total stockholders’ equity	US$ in thousands	9,961,520	9,412,180	7,982,630	5,625,270	4,268,230
Return on total capital		-13.58%	1.94%	22.06%	10.46%	7.19%

December 31, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-1,776,540K ÷ ($3,118,140K + $9,961,520K)
= -13.58%

Albemarle Corp's return on total capital has varied over the years based on the provided data. In December 2020, the return on total capital was 7.19%, indicating that for each dollar of total capital employed, the company generated a return of 7.19 cents.

The return on total capital increased significantly to 10.46% by December 2021, demonstrating improved efficiency in utilizing its total capital to generate profits. In December 2022, the return on total capital further surged to 22.06%, reflecting a remarkable performance in maximizing returns on the total capital invested.

However, there was a notable decline in performance by December 2023, with a return on total capital of 1.94%, suggesting a decrease in the company's ability to generate profits relative to its total capital base. This trend worsened in December 2024, where the return on total capital turned negative at -13.58%, indicating that the company experienced a loss on its total capital investments during that period.

Overall, while Albemarle Corp demonstrated strong performance in 2022, its return on total capital fluctuated in the subsequent years, signaling potential challenges in maintaining consistent profitability relative to its invested capital. Further analysis and investigation into the factors driving these fluctuations would be necessary to assess the company's financial health and sustainability in the long run.