Emerson Electric Company (EMR)
Return on total capital
| 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 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 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 | 1,039,000 | 976,000 | 1,080,000 |
| Long-term debt | US$ in thousands | 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 | 4,277,000 | 4,336,000 | 3,786,000 |
| Total stockholders’ equity | US$ in thousands | 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 | 8,233,000 | 8,755,000 | 8,526,000 |
| Return on total capital | 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% | 8.31% | 7.46% | 8.77% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $118,000K ÷ ($7,632,000K + $20,674,000K)
= 0.42%
Emerson Electric Co.'s return on total capital has shown a declining trend over the past eight quarters. The company's return on total capital decreased from 17.28% in Q4 2022 to 7.93% in Q1 2024. This indicates a decrease in the company's ability to generate profits from its total capital employed in its operations.
The declining trend in return on total capital suggests that Emerson Electric Co. may be experiencing challenges in efficiently utilizing its capital to generate returns for its shareholders. It is important for the company to closely monitor and improve its capital allocation strategies to enhance its profitability and shareholder value in the long term.
Overall, the decreasing trend in return on total capital for Emerson Electric Co. underscores the importance of effective capital management and operational efficiency to maximize returns for the company and its investors.
Peer comparison
Dec 31, 2023