Emerson Electric Company (EMR)
Return on total capital
| 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 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -316,000 | -675,000 | -530,000 | 118,000 | 1,129,000 | 1,434,000 | 1,442,000 | 1,524,000 | 1,755,000 | 1,434,000 | 1,392,000 | 1,309,000 | 1,122,000 | 1,008,000 | 802,000 | 773,000 | 497,000 | 743,000 | 878,000 | 771,000 |
| Long-term debt | US$ in thousands | 7,155,000 | 7,111,000 | 7,614,000 | 7,632,000 | 7,610,000 | 7,642,000 | 8,174,000 | 8,159,000 | 8,259,000 | 8,367,000 | 8,203,000 | 8,722,000 | 5,793,000 | 5,835,000 | 5,823,000 | 5,892,000 | 6,326,000 | 5,500,000 | 3,960,000 | 4,018,000 |
| Total stockholders’ equity | US$ in thousands | 21,636,000 | 20,799,000 | 20,900,000 | 20,674,000 | 20,689,000 | 20,464,000 | 11,360,000 | 10,727,000 | 10,364,000 | 10,315,000 | 10,575,000 | 10,249,000 | 9,883,000 | 9,291,000 | 9,130,000 | 8,895,000 | 8,405,000 | 7,831,000 | 7,517,000 | 8,421,000 |
| Return on total capital | -1.10% | -2.42% | -1.86% | 0.42% | 3.99% | 5.10% | 7.38% | 8.07% | 9.42% | 7.68% | 7.41% | 6.90% | 7.16% | 6.66% | 5.36% | 5.23% | 3.37% | 5.57% | 7.65% | 6.20% |
September 30, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-316,000K ÷ ($7,155,000K + $21,636,000K)
= -1.10%
Return on total capital provides insights into how effectively a company generates profits from the total capital employed in its operations. A higher return on total capital indicates efficient utilization of resources and a potential for better returns for investors.
Emerson Electric Company's return on total capital has fluctuated over the past few quarters. From December 2019 to September 2020, there was a general upward trend in the return on total capital, reaching a peak of 9.42% in September 2022. However, there was a slight decline in the subsequent quarters, reaching a low of -2.42% in June 2024.
The negative returns in recent quarters may indicate challenges in generating sufficient profits relative to the capital invested. It is essential for the company to assess and address the factors contributing to the decline in return on total capital to enhance overall profitability and shareholder value.
Overall, a consistent and healthy return on total capital is crucial for long-term sustainable growth and value creation for Emerson Electric Company and its stakeholders.
Peer comparison
Sep 30, 2024