Lockheed Martin Corporation (LMT)
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 | 9,014,000 | 7,303,000 | 8,119,000 | 8,771,000 | 7,894,000 |
| Long-term debt | US$ in thousands | 17,291,000 | 15,429,000 | 11,670,000 | 11,669,000 | 11,404,000 |
| Total stockholders’ equity | US$ in thousands | 6,835,000 | 9,266,000 | 10,959,000 | 6,015,000 | 3,127,000 |
| Return on total capital | 37.36% | 29.57% | 35.88% | 49.60% | 54.33% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $9,014,000K ÷ ($17,291,000K + $6,835,000K)
= 37.36%
Lockheed Martin Corp.'s return on total capital has exhibited a decreasing trend from 2019 to 2023. The return on total capital was 54.00% in 2019, which then declined to 48.64% by the end of 2020, further decreasing to 40.62% by the end of 2021, and down to 34.42% by the end of 2022. However, there was a slight increase in the return on total capital to 35.28% by the end of 2023.
This trend indicates a declining ability of the company to generate returns on the capital employed in its operations over the years. It may suggest that the company's profitability relative to its invested capital has been decreasing, which could be a concern for the company's financial performance and efficiency in utilizing its capital resources.
Further analysis of the company's financial statements and factors affecting its return on total capital would be necessary to understand the underlying reasons for this trend and to assess the company's overall financial health and performance.