Dow Inc (DOW)
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 | 1,453,000 | 6,789,000 | 8,868,000 | 2,918,000 | 149,000 |
| Long-term debt | US$ in thousands | — | 13,875,000 | 17,125,000 | 20,604,000 | 18,661,000 |
| Total stockholders’ equity | US$ in thousands | 18,607,000 | 20,718,000 | 18,165,000 | 12,435,000 | 13,541,000 |
| Return on total capital | 7.81% | 19.63% | 25.13% | 8.83% | 0.46% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,453,000K ÷ ($—K + $18,607,000K)
= 7.81%
The return on total capital for Dow Inc has shown fluctuating trends over the past five years. The return on total capital was 5.88% at the end of 2023, a significant decrease from the previous year's 16.52%. This decline suggests that the company may have experienced challenges in generating earnings from its total capital investments. The 2023 figure also represents a substantial decrease from the peak of 26.99% at the end of 2021, indicating a notable decrease in the company's ability to generate returns relative to its total capital investment. It would be essential for Dow Inc to assess the reasons behind this decline and consider strategies to improve its return on total capital in order to enhance its financial performance.
Peer comparison
Dec 31, 2023