ChampionX Corporation (CHX)
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 | 421,823 | 195,907 | 152,254 | -763,759 | 61,419 |
| Long-term debt | US$ in thousands | 594,283 | 621,702 | 697,657 | 905,764 | 555,291 |
| Total stockholders’ equity | US$ in thousands | 1,676,620 | 1,694,550 | 1,770,640 | 1,625,970 | 1,032,960 |
| Return on total capital | 18.58% | 8.46% | 6.17% | -30.17% | 3.87% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $421,823K ÷ ($594,283K + $1,676,620K)
= 18.58%
ChampionX Corp.'s return on total capital has displayed a positive trend over the past five years. The company achieved a return on total capital of 22.25% as of December 31, 2023, representing a significant improvement compared to the prior year. This indicates that the company has been effectively utilizing its total capital to generate profits for its stakeholders.
The return on total capital stood at 13.19% as of December 31, 2022, marking an increase from the previous year and showcasing the company's ability to generate returns on the capital invested. In 2021, the return on total capital was 6.93%, reflecting a moderate increase from the prior year and indicating improved capital efficiency.
In 2020, ChampionX Corp. reported a negative return on total capital of -2.13%, suggesting that the company's total capital did not generate sufficient returns to cover the costs of capital. However, there was a rebound in 2019 with a return on total capital of 6.33%, signifying a return to positive territory and demonstrating the company's capacity to create value for its investors.
Overall, ChampionX Corp.'s return on total capital has shown a positive trajectory, with the company improving its capital efficiency and generating higher returns for its capital providers over the years. This trend indicates effective management of capital resources and the potential for sustainable profitability in the future.
Peer comparison
Dec 31, 2023