BorgWarner Inc (BWA)
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 | 546,000 | 1,143,000 | 1,145,000 | 1,231,000 | 1,276,000 | 1,625,000 | 1,618,000 | 1,507,000 | 1,519,000 | 1,067,000 | 1,055,000 | 1,100,000 | 1,151,000 | 1,187,000 | 1,218,000 | 823,000 | 618,000 | 882,000 | 874,000 | 1,237,000 |
| Long-term debt | US$ in thousands | 3,763,000 | 4,195,000 | 3,283,000 | 3,295,000 | 3,707,000 | 3,665,000 | 4,191,000 | 4,175,000 | 4,140,000 | 4,080,000 | 4,156,000 | 4,223,000 | 4,261,000 | 4,288,000 | 4,348,000 | 3,708,000 | 3,738,000 | 2,787,000 | 2,762,000 | 1,664,000 |
| Total stockholders’ equity | US$ in thousands | 5,532,000 | 6,156,000 | 6,093,000 | 5,841,000 | 5,828,000 | 5,768,000 | 7,551,000 | 7,441,000 | 7,224,000 | 6,775,000 | 6,889,000 | 7,050,000 | 6,948,000 | 6,646,000 | 6,649,000 | 6,367,000 | 6,428,000 | 4,757,000 | 4,611,000 | 4,724,000 |
| Return on total capital | 5.87% | 11.04% | 12.21% | 13.47% | 13.38% | 17.23% | 13.78% | 12.97% | 13.37% | 9.83% | 9.55% | 9.76% | 10.27% | 10.86% | 11.08% | 8.17% | 6.08% | 11.69% | 11.85% | 19.36% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $546,000K ÷ ($3,763,000K + $5,532,000K)
= 5.87%
BorgWarner Inc's return on total capital has shown fluctuations over the past few years. It stood at 19.36% as of March 31, 2020, indicating strong capital efficiency. However, there was a noticeable decline in the subsequent quarters, with figures dropping to 6.08% by the end of December 31, 2020. This sharp decrease may suggest inefficiencies in capital utilization or lower profitability during that period.
The return on total capital experienced a recovery in the following quarters, gradually climbing to 13.37% by December 31, 2022. This improvement was followed by relatively stable performance in the subsequent periods, hovering around the 10-13% range up to June 30, 2024. The return showed a decline to 5.87% by December 31, 2024, possibly indicating a dip in profitability or challenges in generating returns on invested capital.
Overall, BorgWarner Inc's return on total capital has displayed variability, with periods of both strength and weakness in capital utilization and profitability. Further analysis of the company's financial and operational strategies may be needed to understand the factors influencing these fluctuations and to assess the sustainability of its return on total capital in the future.
Peer comparison
Dec 31, 2024