Fortune Brands Innovations Inc. (FBIN)
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 | 614,900 | 933,100 | 1,023,400 | 747,700 | 670,100 |
| Long-term debt | US$ in thousands | 2,670,100 | 2,074,300 | 2,309,800 | 2,572,200 | 1,784,600 |
| Total stockholders’ equity | US$ in thousands | 2,293,400 | 2,086,900 | 3,064,800 | 2,775,500 | 2,426,600 |
| Return on total capital | 12.39% | 22.42% | 19.04% | 13.98% | 15.91% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $614,900K ÷ ($2,670,100K + $2,293,400K)
= 12.39%
Fortune Brands Innovations Inc.'s return on total capital has displayed varying trends over the past five years. The return on total capital decreased from 15.91% in 2019 to 13.98% in 2020 before experiencing a significant improvement to 19.04% in 2021. However, the return on total capital decreased again to 22.42% in 2022. In the latest year, as of December 31, 2023, the return on total capital decreased further to 12.39%.
The decreasing trend in return on total capital over the past two years, despite the significant increase in 2021, suggests a potential challenge in efficiently utilizing the company's total capital to generate profits. It would be advisable for the company to closely evaluate its capital allocation strategies and operational efficiency to reverse this declining trend in return on total capital.
Peer comparison
Dec 31, 2023