CNH Industrial N.V. (CNH)
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 | 4,310,000 | 3,505,000 | 2,614,000 | 252,000 | 1,949,000 |
| Long-term debt | US$ in thousands | 27,326,000 | 22,962,000 | 21,091,000 | 26,053,000 | 24,854,000 |
| Total stockholders’ equity | US$ in thousands | 8,234,000 | 6,976,000 | 6,853,000 | 5,029,000 | 6,156,000 |
| Return on total capital | 12.12% | 11.71% | 9.35% | 0.81% | 6.29% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $4,310,000K ÷ ($27,326,000K + $8,234,000K)
= 12.12%
CNH Industrial N.V.'s return on total capital has shown a positive trend over the past five years. The company's return on total capital increased from 6.29% in 2019 to 12.12% in 2023, indicating an improvement in its ability to generate profits from the capital invested in the business. This suggests that CNH Industrial N.V. has been more efficient in utilizing its total capital to generate returns for its shareholders.
The significant increase in return on total capital from 2020 to 2021, and the subsequent steady growth in the following years, demonstrates the company's efforts to enhance its operational efficiency and profitability. The consistent improvement in this metric reflects positively on the company's management and strategic decisions in allocating capital effectively.
Overall, CNH Industrial N.V.'s increasing return on total capital trend indicates a positive outlook for the company's financial performance and suggests that it is making sound investments and utilizing its capital efficiently to drive profitability.
Peer comparison
Dec 31, 2023