Leggett & Platt Incorporated (LEG)
Return on total capital
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -85,000 | 372,200 | 393,300 | 440,600 | 489,000 | 549,200 | 580,100 | 608,600 | 598,400 | 602,700 | 608,500 | 459,600 | 410,500 | 383,900 | 378,900 | 493,700 | 513,900 | 469,300 | 450,100 | 435,000 |
| Long-term debt | US$ in thousands | 1,786,400 | 1,785,900 | 1,785,400 | 1,784,900 | 1,784,400 | — | — | — | 2,082,300 | — | — | — | 1,587,600 | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,333,300 | 1,635,100 | 1,668,000 | 1,666,500 | 1,640,700 | 1,562,200 | 1,614,000 | 1,670,800 | 1,648,000 | 1,575,800 | 1,534,200 | 1,455,700 | 1,424,600 | 1,299,500 | 1,214,200 | 1,238,200 | 1,312,000 | 1,255,200 | 1,238,200 | 1,194,700 |
| Return on total capital | -2.72% | 10.88% | 11.39% | 12.77% | 14.28% | 35.16% | 35.94% | 36.43% | 16.04% | 38.25% | 39.66% | 31.57% | 13.63% | 29.54% | 31.21% | 39.87% | 39.17% | 37.39% | 36.35% | 36.41% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-85,000K ÷ ($1,786,400K + $1,333,300K)
= -2.72%
The return on total capital for Leggett & Platt, Inc. has shown a declining trend over the past eight quarters. It decreased from 14.88% in Q1 2022 to 9.59% in Q4 2023. This decline indicates that the company's ability to generate profits from its total invested capital has weakened over the period.
The return on total capital peaked at 15.38% in Q2 2022 but has steadily decreased since then. The downward trend could be a cause for concern as it may suggest inefficiencies or challenges in managing the company's capital effectively to generate returns.
It is important for the company to closely monitor and address the factors contributing to the decline in return on total capital to improve its financial performance and ensure sustainable profitability in the future.
Peer comparison
Dec 31, 2023