Avery Dennison Corp (AVY)
Return on total capital
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,095,700 | 1,086,200 | 1,078,800 | 962,100 | 889,800 | 820,400 | 852,200 | 988,800 | 1,083,400 | 1,155,700 | 1,104,400 | 1,067,000 | 1,063,000 | 1,065,200 | 1,048,600 | 900,600 | 819,900 | 768,300 | 748,100 | 833,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 2,318,900 | 2,393,900 | 2,287,100 | 2,204,000 | 2,127,900 | 2,063,600 | 2,015,200 | 2,042,900 | 2,032,200 | 2,007,300 | 1,936,900 | 1,932,500 | 1,924,400 | 1,799,200 | 1,703,600 | 1,581,900 | 1,499,900 | 1,334,600 | 1,213,900 | 1,173,400 |
| Return on total capital | 47.25% | 45.37% | 47.17% | 43.65% | 41.82% | 39.76% | 42.29% | 48.40% | 53.31% | 57.57% | 57.02% | 55.21% | 55.24% | 59.20% | 61.55% | 56.93% | 54.66% | 57.57% | 61.63% | 70.99% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $1,095,700K ÷ ($—K + $2,318,900K)
= 47.25%
Avery Dennison Corp's return on total capital has shown some fluctuations over the given period from March 31, 2020, to December 31, 2024. The ratio started at a high level of 70.99% in March 2020, indicating the company was efficiently utilizing its total capital to generate returns. However, there was a slight decline in the subsequent quarters until December 31, 2020, when the return on total capital stood at 54.66%.
From March 31, 2021, there was an uptrend in the return on total capital, reaching a peak of 61.55% by June 30, 2021. This positive performance was sustained for the next few quarters, with slight fluctuations. However, by March 31, 2023, the return on total capital dropped significantly to 48.40%, indicating a potential decrease in the company's efficiency in generating returns from its total capital.
The downward trend continued into 2024, where the return on total capital fluctuated within a range, with a slight increase observed towards the end of the year, standing at 47.25% by December 31, 2024. Overall, the analysis suggests that Avery Dennison Corp's return on total capital exhibited variability over the period, with periods of both strong and weaker performance in terms of capital efficiency.
Peer comparison
Dec 31, 2024