Helmerich and Payne Inc (HP)
Return on total capital
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 610,662 | 50,522 | -405,916 | -610,129 | -27,180 |
| Long-term debt | US$ in thousands | 545,144 | 542,610 | 541,997 | 480,727 | 479,356 |
| Total stockholders’ equity | US$ in thousands | 2,771,940 | 2,765,470 | 2,912,620 | 3,318,510 | 4,012,220 |
| Return on total capital | 18.41% | 1.53% | -11.75% | -16.06% | -0.61% |
September 30, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $610,662K ÷ ($545,144K + $2,771,940K)
= 18.41%
The return on total capital for Helmerich & Payne, Inc. has exhibited significant fluctuations over the past five years. In 2023, the return on total capital increased substantially to 16.09%, reflecting an improvement in the company's ability to generate earnings relative to the total capital employed. This growth is particularly noteworthy when compared to the prior year, where the return on total capital was a mere 0.47%, indicating a marked improvement in the company's efficiency and profitability.
The negative returns on total capital in 2021 and 2020 (-8.96% and -2.31% respectively) suggest that the company was not effectively utilizing its capital to generate profits during those periods, potentially indicating operational or financial challenges. However, the return on total capital rebounded positively in 2019, reaching 4.57%, which may indicate successful strategic initiatives or improved operational performance.
Overall, the trend in Helmerich & Payne, Inc.'s return on total capital demonstrates significant volatility, with the most recent improvement reflecting a potentially positive trajectory. However, the company should continue to focus on optimizing the utilization of its total capital to sustain and enhance its profitability and overall financial performance.
Peer comparison
Sep 30, 2023