Leggett & Platt Incorporated (LEG)
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 | -85,000 | 489,000 | 598,400 | 410,500 | 494,100 |
| Long-term debt | US$ in thousands | 1,786,400 | 1,784,400 | 2,082,300 | 1,587,600 | 1,585,600 |
| Total stockholders’ equity | US$ in thousands | 1,333,300 | 1,640,700 | 1,648,000 | 1,424,600 | 1,312,000 |
| Return on total capital | -2.72% | 14.28% | 16.04% | 13.63% | 17.05% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-85,000K ÷ ($1,786,400K + $1,333,300K)
= -2.72%
Leggett & Platt, Inc.'s return on total capital has shown a declining trend over the past five years. The return on total capital was 15.05% in 2019, which then decreased to 12.30% in 2020. However, there was a slight improvement in 2021 with a return of 14.68% but this was followed by a further decline to 12.89% in 2022. The latest data available as of December 31, 2023, indicates a return on total capital of 9.59%.
This decreasing trend in return on total capital could indicate potential challenges in generating profits relative to the total capital invested in the company. It may imply inefficiencies in capital utilization or decreasing profitability of the company's operations. Further analysis of the company's financial performance and operational strategies would be necessary to understand the factors driving this decline and to identify potential areas for improvement.
Peer comparison
Dec 31, 2023