Halliburton Company (HAL)

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 4,083,000 2,707,000 1,800,000 -2,436,000 -448,000
Long-term debt US$ in thousands 7,928,000 9,127,000 9,132,000 10,316,000
Total stockholders’ equity US$ in thousands 9,391,000 7,948,000 6,713,000 4,974,000 8,012,000
Return on total capital 43.48% 17.05% 11.36% -17.27% -2.44%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $4,083,000K ÷ ($—K + $9,391,000K)
= 43.48%

Halliburton Co.'s return on total capital has shown a positive trend over the past five years. The return on total capital has steadily increased from 10.39% in 2019 to 24.28% in 2023. This indicates that the company is effectively generating returns from its total capital base, including both debt and equity.

The significant improvement in return on total capital year-over-year suggests that Halliburton Co. has been able to deploy its capital more efficiently to generate profits. This increase in profitability could be attributed to factors such as improved operational efficiency, better asset utilization, strategic investments, or effective cost management.

Overall, the rising trend in return on total capital reflects positively on Halliburton Co.'s financial performance and the company's ability to generate returns on the capital employed in its operations. It shows that the company is utilizing its resources effectively to create value for its shareholders.


Peer comparison

Dec 31, 2023