Element Solutions Inc (ESI)
Return on total capital
| Mar 31, 2025 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 398,400 | 346,100 | 332,300 | 237,800 | 194,200 | 182,800 | 165,800 | 248,100 | 286,000 | 315,600 | 337,900 | 327,200 | 307,700 | 311,600 | 325,700 | 315,800 | 284,300 | 239,000 | 248,400 | 258,400 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 2,519,800 | 2,383,000 | 2,439,300 | 2,373,100 | 2,323,700 | 2,328,500 | 2,230,200 | 2,303,500 | 2,354,700 | 2,332,500 | 2,288,100 | 2,398,200 | 2,494,900 | 2,480,700 | 2,479,600 | 2,470,000 | 2,349,500 | 2,319,800 | 2,244,600 | 2,156,800 |
| Return on total capital | 15.81% | 14.52% | 13.62% | 10.02% | 8.36% | 7.85% | 7.43% | 10.77% | 12.15% | 13.53% | 14.77% | 13.64% | 12.33% | 12.56% | 13.14% | 12.79% | 12.10% | 10.30% | 11.07% | 11.98% |
March 31, 2025 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $398,400K ÷ ($—K + $2,519,800K)
= 15.81%
The return on total capital for Element Solutions Inc demonstrated notable fluctuations over the specified period. At the beginning of the period, as of June 30, 2020, the metric stood at 11.98%, indicating a moderate level of profitability relative to its total capital base. Throughout the subsequent quarters, this ratio experienced periods of decline and recovery. Notably, by December 31, 2020, it decreased to 10.30%, reflecting a decrease in profitability or an increase in capital base relative to earnings.
From March 2021 onwards, the returns generally exhibited an upward trajectory, reaching a peak of approximately 14.77% as of September 30, 2022. This suggests periods of improved operational efficiency or favorable market conditions contributing to higher profitability relative to total capital. However, the ratio subsequently declined to approximately 13.53% by December 2022 and further decreased to 10.77% by June 2023.
A more pronounced decline occurred by September 2023, with the ratio dropping to 7.43%, indicating a significant reduction in the company’s efficiency in generating returns from its total capital during this period. The ratio showed some recovery in the following quarters, increasing to 8.36% by March 2024, and further improving to 10.02% by June 2024. As of the most recent data, September 30, 2024, the return on total capital reached 13.62%, and by December 31, 2024, it further increased to 14.52%. The forward-looking estimate as of March 31, 2025, projects a continued upward trend with a value of 15.81%.
Overall, the data indicates that Element Solutions Inc experienced periods of growth and contraction in its effectiveness at generating returns from its total capital, with a general upward trend emerging in late 2024 and early 2025 after a significant downturn in late 2022 and 2023.
Peer comparison
Mar 31, 2025