Avantor Inc (AVTR)
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 | 1,084,800 | 695,300 | 1,116,900 | 970,400 | 369,900 |
| Long-term debt | US$ in thousands | 3,234,700 | 5,276,700 | 5,923,300 | 6,978,000 | 4,867,500 |
| Total stockholders’ equity | US$ in thousands | 5,956,700 | 5,252,600 | 4,855,400 | 4,197,000 | 2,674,300 |
| Return on total capital | 11.80% | 6.60% | 10.36% | 8.68% | 4.90% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,084,800K ÷ ($3,234,700K + $5,956,700K)
= 11.80%
Based on the provided data, Avantor Inc's return on total capital has shown varying trends over the past five years. The return on total capital for Avantor was 4.90% as of December 31, 2020. It increased to 8.68% by December 31, 2021, indicating an improvement in the company's efficiency in generating returns relative to its total capital employed.
The return on total capital further increased significantly to 10.36% by December 31, 2022, suggesting that Avantor was able to generate even higher returns on its total capital investment during that year. However, there was a slight decrease in the return on total capital to 6.60% by December 31, 2023, which may indicate some challenges or changes in the business environment during that period.
Nevertheless, Avantor's return on total capital rebounded strongly to 11.80% by December 31, 2024, surpassing the previous peak and suggesting improved efficiency in utilizing its capital to generate returns for investors. Overall, the increasing trend in Avantor's return on total capital over the years indicates the company's ability to effectively deploy its capital for profitable operations and create value for its stakeholders.
Peer comparison
Dec 31, 2024