Eastman Chemical Company (EMN)
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 | 1,294,000 | 1,096,000 | 1,254,000 | 1,880,000 | 968,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 5,779,000 | 5,458,000 | 5,153,000 | 5,704,000 | 6,023,000 |
| Return on total capital | 22.39% | 20.08% | 24.34% | 32.96% | 16.07% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,294,000K ÷ ($—K + $5,779,000K)
= 22.39%
The return on total capital for Eastman Chemical Company has shown fluctuating trends over the five-year period from December 31, 2020, to December 31, 2024.
- In 2020, the return on total capital was 16.07%, indicating that for every dollar of total capital invested, the company generated a return of 16.07 cents.
- This ratio saw a significant improvement by the end of 2021, reaching 32.96%, signaling a robust performance in utilizing invested capital effectively to generate returns.
- By December 31, 2022, the return on total capital slightly declined to 24.34%, which was still above the level seen in 2020.
- Subsequently, by the end of 2023, the return on total capital decreased further to 20.08%, reflecting a potential challenge in maintaining previous levels of capital efficiency.
- However, by December 31, 2024, there was a modest recovery in the return on total capital to 22.39%, though still below the peak seen in 2021.
Overall, the trend in Eastman Chemical Company's return on total capital indicates some fluctuations, with notable improvements in 2021, followed by some variability in subsequent years. It is essential for the company to monitor and enhance its capital allocation strategies to ensure consistent and optimal returns on invested capital.
Peer comparison
Dec 31, 2024