Goodyear Tire & Rubber Co (GT)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 677,000 | -145,000 | 890,000 | 939,000 | -790,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 4,906,000 | 4,668,000 | 5,300,000 | 4,999,000 | 3,078,000 |
| Return on total capital | 13.80% | -3.11% | 16.79% | 18.78% | -25.67% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $677,000K ÷ ($—K + $4,906,000K)
= 13.80%
The return on total capital for Goodyear Tire & Rubber Co has varied over the past five years.
As of December 31, 2020, the return on total capital was -25.67%, indicating that the company experienced a negative return on the capital employed in its operations during that period. This could suggest inefficiencies or challenges in utilizing the invested capital effectively.
However, there was a significant improvement in the return on total capital by December 31, 2021, reaching 18.78%. This suggests that the company was able to generate a positive return on the capital invested, signaling better operational performance and efficiency.
The return on total capital remained relatively strong in the following years, with values of 16.79% as of December 31, 2022, and 13.80% as of December 31, 2024. These figures indicate that the company continued to effectively utilize its capital to generate returns for its investors.
There was a slight decline in the return on total capital by December 31, 2023, where it stood at -3.11%. This negative return could be a result of various factors such as economic challenges, industry-specific issues, or internal operational inefficiencies.
Overall, the fluctuation in Goodyear Tire & Rubber Co's return on total capital over the five-year period highlights the importance of monitoring and managing capital effectively to ensure sustainable and profitable operations.