Laboratory Corporation of America Holdings (LH)
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 | 1,166,700 | 806,100 | 1,761,400 | 3,336,500 | 2,425,600 |
| Long-term debt | US$ in thousands | 5,331,200 | 4,054,700 | 5,038,800 | 5,416,500 | 5,419,000 |
| Total stockholders’ equity | US$ in thousands | 8,052,200 | 7,875,000 | 10,096,600 | 10,273,400 | 9,436,600 |
| Return on total capital | 8.72% | 6.76% | 11.64% | 21.27% | 16.33% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,166,700K ÷ ($5,331,200K + $8,052,200K)
= 8.72%
Laboratory Corporation of America Holdings' return on total capital has fluctuated over the past five years, starting at 16.33% in December 2020 and peaking at 21.27% in December 2021, signaling strong performance. However, there was a notable decline in the following years, with returns dropping to 11.64% in December 2022, 6.76% in December 2023, and then slightly recovering to 8.72% in December 2024. This trend suggests that the company's ability to generate profits from its total capital has been somewhat inconsistent, possibly indicating changes in operational efficiency, capital allocation strategies, or overall business performance during this period. Further analysis is needed to understand the factors driving these fluctuations and to assess the company's long-term capital utilization and profitability sustainability.
Peer comparison
Dec 31, 2024