Goodyear Tire & Rubber Co (GT)
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 | -147,000 | 843,000 | 884,000 | -820,000 | 503,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 4,668,000 | 5,300,000 | 4,999,000 | 3,078,000 | 4,351,000 |
| Return on total capital | -3.15% | 15.91% | 17.68% | -26.64% | 11.56% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-147,000K ÷ ($—K + $4,668,000K)
= -3.15%
The return on total capital for Goodyear Tire & Rubber Co. has fluctuated over the past five years. In 2023, the return on total capital stood at 5.65%, lower than the previous year's figure of 7.99%. This decline suggests that the company's efficiency in generating profits from the total capital employed has decreased.
Comparing to 2021, where the return on total capital was 8.77%, the 2023 figure indicates a considerable decline in profitability. The negative return on total capital in 2020 (-2.29%) indicates that the company was not able to generate profits using the total capital employed, likely due to adverse economic conditions or operational challenges during that period.
The peak return on total capital of 8.19% in 2019 highlights a period of strong profitability for the company. Overall, the trend in the return on total capital suggests volatility and varying degrees of efficiency in utilizing the total capital over the past five years.