Danaher Corporation (DHR)
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 | 5,873,000 | 8,503,000 | 7,922,000 | 4,770,000 | 3,989,000 |
| Long-term debt | US$ in thousands | 16,707,000 | 19,086,000 | 22,168,000 | 21,193,000 | 21,517,000 |
| Total stockholders’ equity | US$ in thousands | 53,486,000 | 50,082,000 | 45,167,000 | 39,766,000 | 30,271,000 |
| Return on total capital | 8.37% | 12.29% | 11.77% | 7.82% | 7.70% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $5,873,000K ÷ ($16,707,000K + $53,486,000K)
= 8.37%
Danaher Corp.'s return on total capital has fluctuated over the past five years. The return on total capital was 7.24% as of December 31, 2023, down from 12.45% in 2022, but higher than the 11.09% reported in 2021. However, it remains above the levels observed in 2020 (6.94%) and 2019 (6.29%).
The declining trend from 2022 to 2023 could indicate potential challenges in efficiently utilizing its total capital to generate profits. It is essential for the company to assess the factors contributing to this decline and consider strategies to improve its return on total capital in the future. Overall, Danaher Corp. should continue monitoring its return on total capital to ensure optimal performance and sustainable growth.
Peer comparison
Dec 31, 2023