Chemours Co (CC)
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 | -111,000 | 904,000 | 861,000 | 389,000 | 84,000 |
| Long-term debt | US$ in thousands | 3,987,000 | 3,590,000 | 3,724,000 | 4,005,000 | 4,026,000 |
| Total stockholders’ equity | US$ in thousands | 737,000 | 1,107,000 | 1,081,000 | 813,000 | 689,000 |
| Return on total capital | -2.35% | 19.25% | 17.92% | 8.07% | 1.78% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-111,000K ÷ ($3,987,000K + $737,000K)
= -2.35%
Chemours Co's return on total capital has exhibited fluctuations over the past five years. In 2023, the company experienced a negative return on total capital of -2.35%, marking a decline from the previous year's return of 19.25%. This negative trend may raise concerns among stakeholders as it indicates that the company's profitability relative to its total capital employed has deteriorated.
Comparing to 2021 when the return on total capital was 17.92%, the recent performance suggests a significant drop in profitability metrics. However, despite the decrease, the return on total capital in 2023 is higher than in 2019 when it stood at 1.78%.
The negative return on total capital in 2023 could be a reflection of various factors such as operational inefficiencies, increased capital expenses, or challenges in generating sufficient profits relative to the capital invested. It would be essential for the company to analyze the underlying reasons for this decline and implement strategies to improve its return on total capital in order to enhance overall financial performance and investor confidence.
Peer comparison
Dec 31, 2023