Danaher Corporation (DHR)

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 5,202,000 7,580,000 7,839,000 4,815,000
Long-term debt US$ in thousands
Total stockholders’ equity US$ in thousands 49,543,000 53,486,000 50,082,000 45,167,000 39,766,000
Return on total capital 0.00% 9.73% 15.14% 17.36% 12.11%

December 31, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $—K ÷ ($—K + $49,543,000K)
= 0.00%

The return on total capital for Danaher Corporation has exhibited some fluctuations over the period from December 31, 2020, to December 31, 2024.

- In December 31, 2020, the return on total capital stood at 12.11%, indicating the company generated a return of 12.11% on every dollar of capital employed.

- By the end of December 31, 2021, the return on total capital had increased to 17.36%, reflecting a significant improvement in the company's capital efficiency.

- Subsequently, the return on total capital decreased to 15.14% by December 31, 2022, suggesting a slight decline in the company's ability to generate returns relative to the capital invested.

- However, there was a more significant decline by December 31, 2023, with the return on total capital dropping to 9.73%. This decrease may indicate potential challenges faced by the company in efficiently utilizing its total capital.

- Notably, by the end of December 31, 2024, the return on total capital was recorded at 0.00%. This indicates that the company did not generate any return relative to the total capital employed, which raises concerns about the company's capital efficiency during that period.

In conclusion, the fluctuation in Danaher Corporation's return on total capital over the years shows varying levels of efficiency in utilizing its total capital to generate returns, with a significant decline observed in the later years. Further analysis of the company's operational performance and capital allocation strategies may be necessary to understand the factors contributing to these fluctuations.