Laboratory Corporation of America Holdings (LH)
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 | 806,700 | 1,072,200 | 1,220,800 | 1,425,300 | 1,779,000 | 2,340,600 | 2,713,200 | 2,948,500 | 3,336,500 | 3,898,700 | 4,087,000 | 3,708,400 | 2,425,600 | 1,492,000 | 303,500 | 282,600 | 806,700 | 1,050,100 | 1,799,200 | 1,845,900 |
| Long-term debt | US$ in thousands | 4,054,700 | 4,427,600 | 5,042,400 | 5,052,300 | 5,038,800 | 5,334,300 | 5,360,300 | 5,383,300 | 5,416,500 | 5,417,200 | 5,422,600 | 4,920,900 | 5,419,000 | 5,417,300 | 5,416,600 | 5,790,200 | 5,789,800 | 6,101,300 | 6,135,000 | 5,495,600 |
| Total stockholders’ equity | US$ in thousands | 7,875,000 | 7,873,100 | 8,785,000 | 10,341,500 | 10,096,600 | 10,092,200 | 10,400,700 | 10,721,100 | 10,273,400 | 10,601,400 | 10,322,000 | 10,098,400 | 9,436,600 | 8,239,100 | 7,352,700 | 7,020,100 | 7,643,900 | 7,020,100 | 7,144,400 | 7,111,300 |
| Return on total capital | 6.76% | 8.72% | 8.83% | 9.26% | 11.75% | 15.17% | 17.21% | 18.31% | 21.27% | 24.34% | 25.96% | 24.69% | 16.33% | 10.93% | 2.38% | 2.21% | 6.01% | 8.00% | 13.55% | 14.64% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $806,700K ÷ ($4,054,700K + $7,875,000K)
= 6.76%
The return on total capital for Laboratory Corp. Of America Holdings has been gradually decreasing over the past eight quarters, indicating a decline in the company's efficiency in generating profits from the total capital employed. The trend shows a downward trajectory from 18.23% in Q1 2022 to 8.62% in Q4 2023. This decline could potentially be a cause for concern as it may suggest challenges in effectively utilizing the company's capital resources to generate returns for its investors. Further analysis and investigation into the factors contributing to this decreasing trend would be essential to identify areas for improvement and strategic decision-making.
Peer comparison
Dec 31, 2023