Civitas Resources Inc (CIVI)

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	1,182,190	1,685,980	261,479	45,026	157,224
Long-term debt	US$ in thousands	4,785,730	393,293	491,710	0	80,000
Total stockholders’ equity	US$ in thousands	6,181,320	5,373,920	4,655,000	1,045,250	936,690
Return on total capital		10.78%	29.23%	5.08%	4.31%	15.46%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,182,190K ÷ ($4,785,730K + $6,181,320K)
= 10.78%

Civitas Resources Inc's return on total capital has shown significant fluctuations over the past five years. In 2022, the company achieved a high return on total capital of 35.14%, indicating efficient utilization of both debt and equity to generate profits. However, this figure sharply declined to 8.22% in 2021 and 3.15% in 2020, suggesting potential challenges in capital allocation or operational performance during those years.

The return on total capital rebounded to 11.16% in 2023, showing some improvement compared to the previous two years but still below the peak experienced in 2022. This fluctuation may imply varying levels of profitability and capital efficiency in Civitas Resources Inc's operations.

Overall, the return on total capital for Civitas Resources Inc has demonstrated volatility, underscoring the importance of closely monitoring the company's capital management strategies and operational performance to sustain and enhance profitability in the long term.