Avery Dennison Corp (AVY)
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 | 1,115,400 | 813,700 | 1,083,400 | 1,062,800 | 856,700 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 2,318,900 | 2,127,900 | 2,032,200 | 1,924,400 | 1,499,900 |
| Return on total capital | 48.10% | 38.24% | 53.31% | 55.23% | 57.12% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,115,400K ÷ ($—K + $2,318,900K)
= 48.10%
Avery Dennison Corp's Return on Total Capital has shown a slight decline over the years, decreasing from 57.12% in December 2020 to 48.10% by December 2024. Despite this decline, the company has maintained a strong performance in generating returns relative to its total capital investment. The peak return of 57.12% in 2020 indicates the company's efficient use of capital to generate profits. However, the subsequent decreases in return suggest that the company may have experienced challenges in maintaining the same level of profitability or efficiency in capital allocation in the following years. It would be important for investors and stakeholders to further investigate the reasons behind the decline in Return on Total Capital and assess the company's strategies for optimizing its capital utilization in the future.
Peer comparison
Dec 31, 2024