Lear Corporation (LEA)
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 | 839,100 | 1,054,000 | 605,500 | 672,900 | 593,400 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 2,863,900 | 4,918,800 | 4,830,300 | 4,808,400 | 4,614,900 |
| Return on total capital | 29.30% | 21.43% | 12.54% | 13.99% | 12.86% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $839,100K ÷ ($—K + $2,863,900K)
= 29.30%
Lear Corporation's return on total capital has shown a generally positive trend over the years based on the provided data. The return on total capital increased from 12.86% in 2020 to 29.30% in 2024, demonstrating a significant improvement in the company's capital efficiency and profitability.
The steady increase in the return on total capital indicates that Lear Corporation has been effectively utilizing its capital to generate profits for its shareholders. The substantial jump in 2023 and 2024 suggests that the company may have implemented efficient capital allocation strategies or improved operational efficiency during these years.
Overall, the upward trajectory of Lear Corporation's return on total capital signals strong financial performance and effective management of resources, which bodes well for the company's sustainable growth and value creation for its stakeholders.
Peer comparison
Dec 31, 2024