Cabot Corporation (CBT)
Return on total capital
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 507,000 | 367,000 | 422,000 | 6,000 | 286,000 |
| Long-term debt | US$ in thousands | 1,094,000 | 1,089,000 | 717,000 | 1,094,000 | 1,024,000 |
| Total stockholders’ equity | US$ in thousands | 1,264,000 | 898,000 | 947,000 | 691,000 | 998,000 |
| Return on total capital | 21.50% | 18.47% | 25.36% | 0.34% | 14.14% |
September 30, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $507,000K ÷ ($1,094,000K + $1,264,000K)
= 21.50%
The return on total capital for Cabot Corp. has exhibited fluctuations over the past five years. In 2023, the return on total capital decreased to 21.02% from 24.86% in 2022. This may indicate a potential decline in the efficiency of the company's capital utilization. However, the return on total capital in 2023 remains higher than the figures recorded in 2021, 2020, and 2019, suggesting a generally favorable performance in capital management. It is worth noting that the return on total capital in 2020 saw a significant increase compared to the preceding years, indicating a period of improved capital efficiency. Overall, while the recent decline warrants attention, the historical trend suggests that Cabot Corp. has demonstrated effective utilization of capital in generating returns.
Peer comparison
Sep 30, 2023