Fluor Corporation (FLR)
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 | 435,000 | 375,000 | -330,000 | -340,000 | -975,313 |
| Long-term debt | US$ in thousands | 1,158,000 | 978,000 | 1,174,000 | 1,701,100 | 1,651,740 |
| Total stockholders’ equity | US$ in thousands | 1,940,000 | 1,786,000 | 1,393,000 | 1,030,250 | 1,487,750 |
| Return on total capital | 14.04% | 13.57% | -12.86% | -12.45% | -31.07% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $435,000K ÷ ($1,158,000K + $1,940,000K)
= 14.04%
Fluor Corporation's return on total capital has shown a fluctuating trend over the past five years. In 2023, the return on total capital increased to 7.91% compared to the previous year, where it was 4.05%, indicating an improvement in the utilization of both debt and equity capital to generate profits. The return on total capital was also relatively high in 2021 at 7.62% and in 2020 at 5.23%. However, in 2019, the company experienced a significant decline in return on total capital to -18.45%, possibly due to financial challenges or inefficiencies in capital management.
Overall, while there have been fluctuations in Fluor Corporation's return on total capital over the years, the recent improvement in 2023 suggests better capital allocation and operational performance. It is important for the company to sustain this positive trend and continue optimizing its capital structure to enhance long-term profitability.
Peer comparison
Dec 31, 2023