Ashland Global Holdings Inc (ASH)
Return on total capital
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 172,000 | 333,000 | 192,000 | -461,000 | 86,000 |
| Long-term debt | US$ in thousands | 1,314,000 | 1,270,000 | 1,596,000 | 1,573,000 | 1,501,000 |
| Total stockholders’ equity | US$ in thousands | 3,097,000 | 3,220,000 | 2,752,000 | 3,036,000 | 3,571,000 |
| Return on total capital | 3.90% | 7.42% | 4.42% | -10.00% | 1.70% |
September 30, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $172,000K ÷ ($1,314,000K + $3,097,000K)
= 3.90%
The return on total capital for Ashland Inc has fluctuated over the past five years. In 2023, the return on total capital decreased to 3.75% from 6.48% in 2022, indicating a decrease in the company's ability to generate returns on its total capital. However, it is worth noting that the 2023 return on total capital is still higher compared to the 3.83% in 2021 and 2.90% in 2020. The company's return on total capital seems to have fluctuated around the 3-6% range over the past five years, without showing any clear trend of improvement or deterioration. This indicates a degree of inconsistency in the company's ability to effectively utilize its total capital to generate returns for its stakeholders. Further analysis of the company's financial performance and capital structure is necessary to better understand the factors influencing the return on total capital.
Peer comparison
Sep 30, 2023