Chord Energy Corp (CHRD)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,367,660 | 1,838,620 | 349,435 | -1,671 | 117,946 |
| Long-term debt | US$ in thousands | 395,902 | 394,209 | 392,524 | 2,711,570 | 2,735,280 |
| Total stockholders’ equity | US$ in thousands | 5,076,620 | 4,679,800 | 1,032,900 | 3,636,140 | 3,734,580 |
| Return on total capital | 24.99% | 36.24% | 24.51% | -0.03% | 1.82% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,367,660K ÷ ($395,902K + $5,076,620K)
= 24.99%
Chord Energy Corp's return on total capital has shown a declining trend over the past three years, decreasing from 41.16% in 2021 to 31.80% in 2022, and further to 23.71% in 2023. This indicates a decrease in the company's ability to generate profits from its total capital employed in its operations. The declining trend may be a cause for concern as it suggests a decreasing efficiency in utilizing the company's total capital to generate returns for its investors. Further analysis and investigation into the company's operational efficiency and capital allocation strategies may be warranted to address the declining return on total capital.
Peer comparison
Dec 31, 2023