Avient Corp (AVNT)

Return on total capital

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	196,800	154,100	160,400	198,200	243,300	293,000	305,200	313,200	331,400	346,300	327,000	256,900	189,300	144,800	154,400	162,500	156,800	166,500	172,100	175,600
Long-term debt	US$ in thousands	2,070,500	2,070,800	2,179,200	2,177,700	2,176,700	2,502,900	1,249,100	1,250,200	1,850,300	1,851,000	1,852,200	1,852,700	1,854,000	1,855,200	1,849,700	1,209,700	1,210,900	1,406,300	1,392,500	1,440,700
Total stockholders’ equity	US$ in thousands	2,319,200	2,276,900	2,334,700	2,349,800	2,334,500	1,720,400	1,809,700	1,813,200	1,774,700	1,768,800	1,768,200	1,707,000	1,697,100	1,597,000	1,551,300	1,538,600	1,051,900	591,400	570,400	568,200
Return on total capital		4.48%	3.54%	3.55%	4.38%	5.39%	6.94%	9.98%	10.22%	9.14%	9.57%	9.03%	7.22%	5.33%	4.19%	4.54%	5.91%	6.93%	8.33%	8.77%	8.74%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $196,800K ÷ ($2,070,500K + $2,319,200K)
= 4.48%

Looking at the trend in Avient Corp's return on total capital over the past eight quarters, we observe some fluctuations. The return on total capital has been decreasing steadily from 11.20% in Q2 2022 to 4.47% in Q4 2023. This decline could indicate that the company's ability to generate profits from its total capital has been weakening.

It is notable that the return on total capital peaked at 11.20% in Q2 2022 but has since been on a downward trajectory. This downward trend may raise concerns about the company's profitability and efficiency in utilizing its capital resources effectively.

The recent return on total capital of 4.47% in Q4 2023 is relatively low compared to the historical performance, suggesting potential challenges in generating returns on the capital invested. Further analysis of the underlying reasons for this decline is warranted to assess the company's operational performance and financial health accurately.