Baxter International Inc (BAX)
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 | 3,134,000 | -1,950,000 | 1,672,000 | 1,437,000 | 1,071,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 8,402,000 | 5,833,000 | 9,077,000 | 8,689,000 | 7,882,000 |
| Return on total capital | 37.30% | -33.43% | 18.42% | 16.54% | 13.59% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $3,134,000K ÷ ($—K + $8,402,000K)
= 37.30%
Baxter International Inc.'s return on total capital has been on a declining trend over the past five years, as evidenced by the decreasing percentages reported annually. The return on total capital was 1.63% in 2023, down from 4.03% in 2022, 6.37% in 2021, 10.73% in 2020, and 13.39% in 2019.
This trend indicates that Baxter International Inc. may be facing challenges in generating returns on the total capital employed in its operations. A declining return on total capital could be a cause for concern, as it suggests that the company may not be effectively utilizing its capital investments to generate profits.
Further analysis, including examination of the company's operating efficiency, profitability, and capital structure, would be necessary to identify the specific factors contributing to the decreasing trend in return on total capital and to develop potential strategies for improvement.
Peer comparison
Dec 31, 2023