Ingredion Incorporated (INGR)
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 | 970,000 | 953,000 | 763,000 | 322,000 | 588,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 3,804,000 | 3,538,000 | 3,195,000 | 3,136,000 | 2,981,000 |
| Return on total capital | 25.50% | 26.94% | 23.88% | 10.27% | 19.72% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $970,000K ÷ ($—K + $3,804,000K)
= 25.50%
The Return on Total Capital (ROTC) measures the efficiency at which Ingredion Incorporated generates returns from all of its capital employed, including debt and equity. Based on the provided data, Ingredion's ROTC has varied over the years:
1. As of December 31, 2020, the ROTC stood at 19.72%, indicating that the company was able to generate a return of 19.72% on every dollar of total capital invested.
2. By December 31, 2021, the ROTC decreased to 10.27%, suggesting a decline in efficiency in generating returns on capital.
3. However, the ROTC rebounded significantly by December 31, 2022, reaching 23.88%, signaling an improvement in capital efficiency and profitability.
4. The upward trend continued, with ROTC climbing to 26.94% by December 31, 2023, indicating the company's ability to generate even higher returns on its total capital.
5. As of the latest data point on December 31, 2024, the ROTC remained strong at 25.50%, reflecting Ingredion's consistent ability to generate favorable returns on its total capital.
Overall, the trend in Ingredion's ROTC shows fluctuations but generally demonstrates the company's effectiveness in utilizing its capital resources to generate returns for its investors and stakeholders. The recent high ROTC figures suggest a positive outlook for the company's financial performance and capital efficiency.
Peer comparison
Dec 31, 2024