Leggett & Platt Incorporated (LEG)
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 | -423,300 | -84,700 | 486,800 | 594,100 | 406,100 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 689,400 | 1,333,300 | 1,641,400 | 1,648,600 | 1,390,300 |
| Return on total capital | -61.40% | -6.35% | 29.66% | 36.04% | 29.21% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-423,300K ÷ ($—K + $689,400K)
= -61.40%
The return on total capital for Leggett & Platt Incorporated has shown fluctuating trends over the years based on the provided data.
- In December 31, 2020, the return on total capital stood at 29.21%, representing a respectable performance in generating profits relative to the total capital employed in the business.
- By December 31, 2021, the return on total capital increased significantly to 36.04%, indicating improved efficiency in utilizing the total capital to generate returns.
- In December 31, 2022, the return on total capital slightly decreased to 29.66%, but still maintained a solid performance in generating returns on the total capital invested.
- However, a concerning trend emerged by December 31, 2023, where the return on total capital turned negative at -6.35%, indicating a potential issue in effectively utilizing the total capital to generate profits.
- The most alarming observation was made by December 31, 2024, with a sharp decline in the return on total capital to -61.40%. This indicates a significant deterioration in the company's ability to generate profits relative to the total capital employed, raising serious concerns about the company's financial performance and operational efficiency.
In summary, while Leggett & Platt Incorporated demonstrated strong performance in the earlier years with positive returns on total capital, a noticeable decline in recent years, particularly in 2024, suggests the need for a closer examination of the company's operational strategies and financial management to address the challenges impacting its profitability and capital utilization.
Peer comparison
Dec 31, 2024