Baxter International Inc (BAX)
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 | -122,000 | 415,000 | -2,229,000 | 1,629,000 | 1,713,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 6,964,000 | 8,402,000 | 5,833,000 | 9,077,000 | 8,689,000 |
| Return on total capital | -1.75% | 4.94% | -38.21% | 17.95% | 19.71% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-122,000K ÷ ($—K + $6,964,000K)
= -1.75%
Baxter International Inc's return on total capital has shown fluctuations over the past five years. In 2020, the company achieved a healthy return of 19.71%, indicating efficient utilization of both debt and equity capital to generate profits. However, this metric declined to 17.95% by the end of 2021, although it remained relatively strong.
The year 2022 marked a significant decrease in return on total capital to -38.21%, suggesting potential challenges in the company's capital management efficiency during that period. This drastic decline could be a cause for concern and requires further investigation into the company's operational performance and financial health.
In 2023, there was a modest recovery with a return on total capital of 4.94%, indicating some improvement in capital utilization compared to the previous year. However, the metric declined once again to -1.75% by the end of 2024, suggesting continued challenges in effectively leveraging capital to generate returns.
Overall, the trend in Baxter International Inc's return on total capital reveals a mix of positive and negative performance levels over the past five years, highlighting the importance of continually monitoring and evaluating the company's capital management strategies to ensure sustainable profitability and value creation.
Peer comparison
Dec 31, 2024