Danaher Corporation (DHR)
Return on total capital
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 5,873,000 | 7,052,000 | 7,555,000 | 8,216,000 | 8,503,000 | 8,387,000 | 7,863,000 | 7,934,000 | 7,922,000 | 7,395,000 | 7,045,000 | 6,153,000 | 4,770,000 | 4,657,300 | 4,406,200 | 4,005,000 | 3,989,000 | 3,358,500 | 3,353,200 | 3,333,700 |
| Long-term debt | US$ in thousands | 16,707,000 | 19,513,000 | 18,285,000 | 18,261,000 | 19,086,000 | 18,542,000 | 20,052,000 | 21,768,000 | 22,168,000 | 23,591,000 | 20,400,000 | 20,267,000 | 21,193,000 | 21,806,100 | 22,370,000 | 22,737,200 | 21,517,000 | 16,536,200 | 10,144,400 | 9,458,200 |
| Total stockholders’ equity | US$ in thousands | 53,486,000 | 52,407,000 | 51,716,000 | 51,478,000 | 50,082,000 | 46,985,000 | 46,594,000 | 46,356,000 | 45,167,000 | 43,451,000 | 42,756,000 | 40,419,000 | 39,766,000 | 37,961,000 | 36,261,700 | 31,055,100 | 30,271,000 | 32,502,300 | 32,201,200 | 31,556,600 |
| Return on total capital | 8.37% | 9.81% | 10.79% | 11.78% | 12.29% | 12.80% | 11.80% | 11.65% | 11.77% | 11.03% | 11.15% | 10.14% | 7.82% | 7.79% | 7.52% | 7.45% | 7.70% | 6.85% | 7.92% | 8.13% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $5,873,000K ÷ ($16,707,000K + $53,486,000K)
= 8.37%
To analyze Danaher Corp.'s return on total capital based on the provided data, we observe a declining trend in the return on total capital over the last eight quarters. The return on total capital has decreased from 12.90% in Q3 2022 to 7.24% in Q4 2023.
This suggests a potential deterioration in the company's ability to generate profits relative to the total capital employed in its operations. A decreasing return on total capital can indicate inefficiency in capital utilization or a decline in the company's overall profitability.
It is essential for Danaher Corp. to further investigate the underlying reasons for the decline in return on total capital and take appropriate measures to improve operational efficiency and profitability in order to enhance shareholder value and ensure sustainable long-term growth.
Peer comparison
Dec 31, 2023