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