Laboratory Corporation of America Holdings (LH)
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 | 806,100 | 1,761,400 | 3,336,500 | 2,425,600 | 1,344,500 |
| Long-term debt | US$ in thousands | 4,054,700 | 5,038,800 | 5,416,500 | 5,419,000 | 5,789,800 |
| Total stockholders’ equity | US$ in thousands | 7,875,000 | 10,096,600 | 10,273,400 | 9,436,600 | 7,643,900 |
| Return on total capital | 6.76% | 11.64% | 21.27% | 16.33% | 10.01% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $806,100K ÷ ($4,054,700K + $7,875,000K)
= 6.76%
Laboratory Corp. Of America Holdings' return on total capital has shown a decreasing trend over the past five years.
In 2023, the return on total capital was 8.62%, a significant drop compared to the previous year's 13.75%. This decline may indicate inefficiencies in the company's capital allocation or operational performance.
In 2022, the return on total capital was 13.75%, showing a noticeable decrease from the high of 21.09% in 2021. This decline could be attributed to a number of factors, such as increased capital expenditure or lower profitability.
Despite the decrease in 2022, the company's return on total capital was relatively strong in the preceding years. In 2021, the return on total capital reached 21.09%, reflecting efficient capital management and profitability.
In 2020, the return on total capital was 19.36%, indicating continued strong performance, albeit slightly lower than in 2021. Similarly, in 2019, the return on total capital was 10.05%, showing a steady improvement over the years leading up to 2020.
Overall, the fluctuation in Laboratory Corp. Of America Holdings' return on total capital suggests varying degrees of capital efficiency and profitability in different years, with the company experiencing a notable decline in 2023. Monitoring this ratio closely can provide insights into the company's financial performance and management strategies.
Peer comparison
Dec 31, 2023