California Resources Corp (CRC)
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 | 808,000 | 812,000 | 293,000 | 429,000 | 769,000 |
| Long-term debt | US$ in thousands | 540,000 | 592,000 | 589,000 | 4,877,000 | 4,500,000 |
| Total stockholders’ equity | US$ in thousands | 2,219,000 | 1,864,000 | 1,688,000 | -389,000 | -361,000 |
| Return on total capital | 29.29% | 33.06% | 12.87% | 9.56% | 18.58% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $808,000K ÷ ($540,000K + $2,219,000K)
= 29.29%
California Resources Corporation's return on total capital has exhibited variability over the past three years, with significant changes in performance. In 2023, the return on total capital stood at 27.91%, showing a decline from the previous year's ratio of 30.70%. Despite this decrease, the company's return on total capital remains relatively high, indicating its ability to generate earnings from the total capital employed in its operations.
The 2023 return on total capital of 27.91% is substantially higher compared to the 2021 ratio of 9.57%, signifying a notable improvement in the company's capital efficiency and profitability over the two-year period. This suggests that California Resources Corporation has managed its capital more effectively in 2023 compared to 2021, resulting in better returns for its investors.
Overall, the analysis of California Resources Corporation's return on total capital demonstrates that the company has shown resilience in generating returns relative to the total capital invested, with fluctuations in performance reflecting changes in capital efficiency and profitability over the years. Continued monitoring of this ratio will be essential to assess the company's ability to sustain and enhance its returns in the future.
Peer comparison
Dec 31, 2023