Knowles Cor (KN)
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 | 51,100 | -414,800 | 115,800 | 29,200 | 81,200 |
| Long-term debt | US$ in thousands | 224,100 | 45,000 | 70,000 | 0 | 156,800 |
| Total stockholders’ equity | US$ in thousands | 1,034,100 | 992,900 | 1,459,500 | 1,303,500 | 1,288,500 |
| Return on total capital | 4.06% | -39.97% | 7.57% | 2.24% | 5.62% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $51,100K ÷ ($224,100K + $1,034,100K)
= 4.06%
Knowles Corp's return on total capital has shown fluctuations over the past five years. In 2023, the return on total capital was 3.31%, a decrease from the previous year's figure of 9.39%. This decline indicates a lower efficiency in generating profits from the total capital employed in the business.
Comparing to 2021 and 2020, where the return on total capital was 7.83% and 3.32% respectively, the company experienced varying levels of profitability from its total capital investments. The highest return on total capital was recorded in 2019 at 5.99%, indicating a relatively better performance compared to subsequent years.
The decreasing trend in return on total capital from 2019 to 2023 raises concerns about the company's ability to generate sustainable returns from its capital investments. It's important for stakeholders to monitor this metric closely to assess the company's financial performance and efficiency in utilizing its capital resources effectively.
Peer comparison
Dec 31, 2023