Laboratory Corporation of America Holdings (LH)
Return on total capital
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,166,700 | 821,100 | 849,100 | 822,600 | 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 |
| Long-term debt | US$ in thousands | 5,331,200 | 5,352,100 | 3,047,300 | 3,047,600 | 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 |
| Total stockholders’ equity | US$ in thousands | 8,052,200 | 8,170,200 | 8,005,800 | 7,959,600 | 7,875,000 | 7,873,100 | 8,785,000 | 8,785,000 | 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 |
| Return on total capital | 8.72% | 6.07% | 7.68% | 7.47% | 6.76% | 8.72% | 8.83% | 10.30% | 11.75% | 15.17% | 17.21% | 18.31% | 21.27% | 24.34% | 25.96% | 24.69% | 16.33% | 10.93% | 2.38% | 2.21% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $1,166,700K ÷ ($5,331,200K + $8,052,200K)
= 8.72%
The return on total capital for Laboratory Corporation of America Holdings has shown fluctuations over the analyzed period. From March 31, 2020, to June 30, 2022, the return on total capital increased steadily from 2.21% to 17.21%, indicating an improvement in the company's ability to generate profits relative to the total capital employed. However, from September 30, 2022, to December 31, 2024, there was a gradual decline in the return on total capital, dropping to 8.72% by the end of 2024.
Overall, the highest return on total capital was recorded on March 31, 2021 (24.69%), suggesting a period of strong profitability efficiency. In contrast, the lowest return on total capital was observed on June 30, 2023 (8.83%), reflecting potential challenges in generating returns relative to the capital employed during that period.
It is essential for stakeholders to monitor these fluctuations in the return on total capital to assess the company's effectiveness in utilizing its capital resources efficiently and generating adequate returns for its investors.
Peer comparison
Dec 31, 2024