Dow Inc (DOW)
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 | 2,459,000 | 1,453,000 | 6,789,000 | 8,868,000 | 2,918,000 |
| Long-term debt | US$ in thousands | — | — | 13,875,000 | 17,125,000 | 20,604,000 |
| Total stockholders’ equity | US$ in thousands | 17,355,000 | 18,607,000 | 20,718,000 | 18,165,000 | 12,435,000 |
| Return on total capital | 14.17% | 7.81% | 19.63% | 25.13% | 8.83% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $2,459,000K ÷ ($—K + $17,355,000K)
= 14.17%
Dow Inc's return on total capital has shown fluctuations over the past years. The ratio was 8.83% as of December 31, 2020, indicating a moderate performance in utilizing both debt and equity to generate profits. However, there was a significant improvement in performance by December 31, 2021, with the return on total capital rising to 25.13%, signaling a more efficient use of capital.
By December 31, 2022, although the return on total capital decreased to 19.63%, it remained relatively high, showcasing continued effectiveness in capital utilization. However, there was a notable drop in performance by December 31, 2023, where the return on total capital decreased to 7.81%, suggesting potential challenges in generating returns compared to the previous years.
On a positive note, as of December 31, 2024, the return on total capital improved to 14.17%, indicating a rebound in performance and a potential return to a more efficient capital utilization strategy. Overall, Dow Inc's performance in terms of return on total capital has shown variability, with peaks and troughs, highlighting the importance of monitoring and managing capital efficiency for sustained financial success.
Peer comparison
Dec 31, 2024