Eaton Corporation PLC (ETN)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 3,823,000 | 2,908,000 | 3,038,000 | 1,890,000 | 2,788,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 19,036,000 | 17,038,000 | 16,413,000 | 14,930,000 | 16,082,000 |
| Return on total capital | 20.08% | 17.07% | 18.51% | 12.66% | 17.34% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $3,823,000K ÷ ($—K + $19,036,000K)
= 20.08%
The return on total capital for Eaton Corporation plc has shown an improving trend over the past five years, with a notable increase from 7.93% in 2020 to 13.73% in 2023. This indicates that the company has been more effective in generating profits from the total capital employed in its operations. The consistent growth in return on total capital reflects positively on Eaton Corporation's operational efficiency and ability to generate returns for its investors. It suggests that the company's management is effectively utilizing its capital to generate profits and create shareholder value. Overall, the increasing trend in return on total capital demonstrates a strengthening financial performance and efficiency in capital utilization by Eaton Corporation plc.
Peer comparison
Dec 31, 2023