Kraft Heinz Co (KHC)
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 | 4,554,000 | 3,882,000 | 3,743,000 | 2,419,000 | 4,024,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 49,526,000 | 48,678,000 | 49,298,000 | 50,103,000 | 51,623,000 |
| Return on total capital | 9.20% | 7.97% | 7.59% | 4.83% | 7.79% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $4,554,000K ÷ ($—K + $49,526,000K)
= 9.20%
Kraft Heinz Co's return on total capital has shown a fluctuating trend over the past five years, from 9.20% in 2023 to 7.97% in 2022, 7.59% in 2021, 4.83% in 2020, and 7.79% in 2019. The return on total capital indicates the efficiency of the company in generating profits from both equity and debt capital invested in its operations.
The improvement in the return on total capital from 2020 to 2023 suggests that Kraft Heinz has been more successful in utilizing its capital resources to generate returns for its investors. However, the fluctuating nature of the ratio indicates potential volatility in the company's profitability and capital efficiency. It would be prudent for investors and stakeholders to closely monitor this ratio as it can provide insights into the company's overall financial health and operational effectiveness.
Peer comparison
Dec 31, 2023