Kenvue Inc. (KVUE)
Return on total capital
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,841,000 | 1,811,000 | 1,842,000 | 2,380,000 | 2,440,000 |
| Long-term debt | US$ in thousands | 7,500,000 | 8,000,000 | 7,600,000 | 7,700,000 | 8,000,000 |
| Total stockholders’ equity | US$ in thousands | 9,668,000 | 10,644,000 | 10,178,000 | 10,621,000 | 11,211,000 |
| Return on total capital | 10.72% | 9.71% | 10.36% | 12.99% | 12.70% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $1,841,000K ÷ ($7,500,000K + $9,668,000K)
= 10.72%
To analyze Kenvue Inc.'s return on total capital, we will examine the trend over the given periods:
1. December 31, 2023: 12.70%
2. March 31, 2024: 12.99%
3. June 30, 2024: 10.36%
4. September 30, 2024: 9.71%
5. December 31, 2024: 10.72%
Kenvue Inc.'s return on total capital has shown some fluctuations over the periods under review. The return dipped from 12.99% in March 2024 to 10.36% in June 2024, indicating a temporary decline in efficiency in utilizing its total capital. However, there was a slight recovery in the subsequent periods, with the return improving to 10.72% by December 2024.
It is essential for the company to maintain a consistently strong return on total capital to demonstrate effective utilization of its overall capital structure. The management may need to focus on operational efficiencies and strategic investments to ensure sustained profitability and value creation for its stakeholders.
Peer comparison
Dec 31, 2024