Emerson Electric Company (EMR)
Return on total capital
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,041,000 | 1,882,000 | 2,685,000 | 2,796,000 | 1,931,000 |
| Long-term debt | US$ in thousands | 7,155,000 | 7,610,000 | 8,259,000 | 5,793,000 | 6,326,000 |
| Total stockholders’ equity | US$ in thousands | 21,636,000 | 20,689,000 | 10,364,000 | 9,883,000 | 8,405,000 |
| Return on total capital | 3.62% | 6.65% | 14.42% | 17.84% | 13.11% |
September 30, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,041,000K ÷ ($7,155,000K + $21,636,000K)
= 3.62%
Emerson Electric Company's return on total capital has exhibited a declining trend over the past five years, as indicated by the decreasing values from 17.84% in 2021 to 3.62% in 2024. This signifies a decrease in the company's ability to generate profits relative to its total capital employed. The substantial drop in the return on total capital from 2021 to 2024 may indicate challenges in efficiently utilizing its capital resources or a decrease in profitability relative to the amount of capital invested. Further investigation into the company's financial performance and capital management practices may be warranted to identify the underlying reasons behind this downward trend.
Peer comparison
Sep 30, 2024