Avery Dennison Corp (AVY)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 813,700 | 1,083,400 | 1,058,900 | 803,600 | 322,700 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 2,127,900 | 2,032,200 | 1,924,400 | 1,484,900 | 1,204,000 |
| Return on total capital | 38.24% | 53.31% | 55.02% | 54.12% | 26.80% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $813,700K ÷ ($—K + $2,127,900K)
= 38.24%
Avery Dennison Corp's return on total capital has shown a fluctuating trend over the past five years. The return on total capital decreased from 53.31% in 2019 to 26.80% in 2020, indicating a significant drop. However, the company managed to rebound strongly in the following years, reaching 55.02% in 2021 and further increasing to 53.31% in 2022.
In the most recent year, 2023, Avery Dennison Corp's return on total capital slightly declined to 38.24%. Despite the reduction, the company's return on total capital remained relatively high compared to the previous years. This suggests that Avery Dennison Corp has effectively utilized its capital resources to generate profits, albeit at a slightly lower rate in 2023 compared to the two preceding years.
Overall, Avery Dennison Corp's performance in terms of return on total capital demonstrates a mix of fluctuations and strong performance, indicating the company's ability to efficiently deploy its capital resources to generate returns for its shareholders.
Peer comparison
Dec 31, 2023