Celanese Corporation (CE)
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 | 1,890,000 | 1,810,000 | 2,311,000 | 2,341,000 | 1,091,000 |
| Long-term debt | US$ in thousands | 13,662,000 | 13,373,000 | 3,176,000 | 3,227,000 | 3,409,000 |
| Total stockholders’ equity | US$ in thousands | 7,091,000 | 5,637,000 | 4,189,000 | 3,526,000 | 2,507,000 |
| Return on total capital | 9.11% | 9.52% | 31.38% | 34.67% | 18.44% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,890,000K ÷ ($13,662,000K + $7,091,000K)
= 9.11%
Celanese Corp's return on total capital has exhibited fluctuations over the past five years. The return on total capital was highest in 2021 at 25.55%, reflecting strong efficiency in generating returns from both debt and equity sources. This was followed by a notable decline in 2022 to 7.89%, indicating a reduction in the company's ability to utilize its total capital effectively to generate profits.
However, in 2023, the return on total capital further decreased to 6.35%, reflecting a continued challenge in efficiently deploying the company's total capital to generate sufficient returns. The downward trend in the return on total capital from 2021 to 2023 suggests potential operational or strategic challenges that may be impacting Celanese Corp's profitability and efficiency in utilizing its capital resources effectively.
It is important for the company to closely evaluate its capital allocation strategies, operational efficiencies, and overall business performance to improve its return on total capital and enhance shareholder value in the future.
Peer comparison
Dec 31, 2023