Avanos Medical Inc (AVNS)
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 | -391,100 | 4,500 | 36,700 | -29,400 | -44,900 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 828,500 | 1,236,300 | 1,291,200 | 1,263,900 | 1,256,500 |
| Return on total capital | -47.21% | 0.36% | 2.84% | -2.33% | -3.57% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-391,100K ÷ ($—K + $828,500K)
= -47.21%
The return on total capital for Avanos Medical Inc has shown fluctuating performance over the past five years. In December 31, 2020, the return on total capital was -3.57%, indicating that the company's capital utilization may have been inefficient, resulting in a negative return. The trend improved slightly to -2.33% by December 31, 2021.
In the following year, Avanos Medical Inc managed to generate a positive return on total capital of 2.84% by December 31, 2022, indicating better capital management strategies. However, the return dropped to 0.36% by December 31, 2023, suggesting a potential challenge in sustaining the positive performance.
The most significant decline was observed in December 31, 2024, with a sharp decrease to -47.21%, reflecting a considerable decrease in the company's ability to generate returns relative to its total capital. This drastic change may warrant further investigation into the factors leading to such a substantial decline in return on total capital.
Overall, Avanos Medical Inc's return on total capital has demonstrated inconsistency and volatility over the five-year period, signaling the importance of closely monitoring and optimizing capital allocation strategies to enhance long-term financial performance.
Peer comparison
Dec 31, 2024