CF Industries Holdings Inc (CF)
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 | 2,230,000 | 5,397,000 | 1,729,000 | 623,000 | 1,003,000 |
| Long-term debt | US$ in thousands | 2,968,000 | 2,965,000 | 3,465,000 | 3,712,000 | 3,957,000 |
| Total stockholders’ equity | US$ in thousands | 5,717,000 | 5,051,000 | 3,206,000 | 2,922,000 | 2,897,000 |
| Return on total capital | 25.68% | 67.33% | 25.92% | 9.39% | 14.63% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $2,230,000K ÷ ($2,968,000K + $5,717,000K)
= 25.68%
CF Industries Holdings Inc's return on total capital has fluctuated significantly over the past five years. In 2022, the company reported an exceptionally high return on total capital of 70.67%, indicating strong efficiency in generating profits from its total capital employed. This substantial increase may suggest improved operational performance or capital structure optimization during that period.
However, in subsequent years, the return on total capital experienced notable declines, dropping to 33.14% in 2021, 8.80% in 2020, and 13.57% in 2019. These reductions suggest a decrease in the company's ability to generate returns relative to its total capital. Factors contributing to this trend could include changes in market conditions, operational challenges, or shifts in the capital structure.
Overall, CF Industries Holdings Inc's return on total capital has shown volatility over the analyzed period, with significant fluctuations in performance levels. This underscores the importance of monitoring and evaluating the company's capital allocation strategies and operational efficiency to ensure sustainable returns for shareholders.
Peer comparison
Dec 31, 2023