Chevron Corp (CVX)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 28,100,000 | 28,309,000 | 50,190,000 | 23,263,000 | -6,196,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 157,030,000 | 160,957,000 | 191,856,000 | 167,378,000 | 162,209,000 |
| Return on total capital | 17.89% | 17.59% | 26.16% | 13.90% | -3.82% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $28,100,000K ÷ ($—K + $157,030,000K)
= 17.89%
Chevron Corp's return on total capital has shown significant fluctuations over the past five years. The ratio was negative at -3.82% on December 31, 2020, indicating that the company's total capital was not generating sufficient returns. However, there has been a notable improvement since then, with the ratio increasing to 13.90% by December 31, 2021. This upward trend continued as the return on total capital surged to 26.16% by December 31, 2022, demonstrating improved efficiency in utilizing both equity and debt to generate profits.
Despite a slight dip in the ratio to 17.59% by December 31, 2023, Chevron Corp maintained a relatively strong performance in terms of return on total capital. The ratio further increased to 17.89% by December 31, 2024, indicating continued efficiency in deploying its total capital to generate returns for shareholders.
Overall, Chevron Corp's return on total capital has shown positive growth and improvement over the period, reflecting the company's efforts to optimize its capital structure and enhance profitability. This trend suggests that Chevron Corp has been successful in generating favorable returns on the total capital deployed in its operations.
Peer comparison
Dec 31, 2024