Dow Inc (DOW)
Return on total capital
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 2,469,000 | 1,852,000 | 1,947,000 | 2,036,000 | 1,453,000 | 2,596,000 | 3,147,000 | 4,595,000 | 6,789,000 | 8,043,000 | 9,309,000 | 9,604,000 | 8,868,000 | 8,634,000 | 6,452,000 | 3,849,000 | 2,936,000 | -1,048,000 | -613,000 | -191,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | 14,239,000 | 13,875,000 | 11,622,000 | 12,726,000 | 15,320,000 | 17,125,000 | 16,970,000 | 18,682,000 | 19,319,000 | 20,604,000 | 19,641,000 | 19,117,000 | 17,639,000 |
| Total stockholders’ equity | US$ in thousands | 17,355,000 | 18,311,000 | 18,318,000 | 18,425,000 | 18,607,000 | 19,567,000 | 19,997,000 | 20,181,000 | 20,718,000 | 18,117,000 | 18,973,000 | 18,880,000 | 18,165,000 | 16,439,000 | 15,573,000 | 14,003,000 | 12,435,000 | 12,354,000 | 12,537,000 | 12,906,000 |
| Return on total capital | 14.23% | 10.11% | 10.63% | 11.05% | 7.81% | 13.27% | 15.74% | 13.35% | 19.63% | 27.05% | 29.37% | 28.08% | 25.13% | 25.84% | 18.84% | 11.55% | 8.89% | -3.28% | -1.94% | -0.63% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $2,469,000K ÷ ($—K + $17,355,000K)
= 14.23%
Return on total capital is a key financial ratio that provides insight into how effectively a company is utilizing its capital to generate profits. Looking at the data for Dow Inc over the past few years, we observe a fluctuating trend in its return on total capital.
From March 31, 2020, to September 30, 2022, the company experienced negative return on total capital figures, indicating that during this period, the company was not effectively generating profits relative to its total capital employed. However, starting from December 31, 2022, the trend reversed, with the return on total capital steadily increasing.
The most notable improvement was seen between March 31, 2022, and June 30, 2022, when the return on total capital increased significantly from 28.08% to 29.37%. Although there was a slight decline in the following quarters, the company managed to maintain a relatively high return on total capital above 10% by the end of December 31, 2024.
Overall, the increasing trend in return on total capital from late 2022 to the end of 2024 indicates that Dow Inc has been able to enhance its capital utilization efficiency and generate healthier returns for its invested capital.
Peer comparison
Dec 31, 2024