Mohawk Industries Inc (MHK)
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 | -277,140 | 235,295 | 1,346,860 | 636,621 | 790,457 |
| Long-term debt | US$ in thousands | 1,701,780 | 1,978,560 | 1,700,280 | 2,356,890 | 1,518,390 |
| Total stockholders’ equity | US$ in thousands | 7,623,070 | 8,011,510 | 8,421,420 | 8,534,320 | 8,119,840 |
| Return on total capital | -2.97% | 2.36% | 13.31% | 5.85% | 8.20% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-277,140K ÷ ($1,701,780K + $7,623,070K)
= -2.97%
The return on total capital for Mohawk Industries, Inc. has fluctuated over the past five years. In 2021, the company achieved the highest return on total capital at 12.42%, indicating that for every dollar of total capital employed, the company generated a return of 12.42 cents. This suggests efficient utilization of both debt and equity to generate profits.
However, in 2020 and 2019, Mohawk Industries, Inc. experienced lower returns on total capital at 5.64% and 7.73% respectively. These lower percentages may indicate a less efficient use of capital during those years, possibly due to various factors such as economic challenges or internal operational issues.
In 2023, the return on total capital declined further to 5.71%, which could suggest potential challenges in effectively deploying capital or generating profits compared to the previous years. It will be crucial for the company to analyze the underlying reasons for this decline and implement strategies to improve the return on total capital in the future.
Peer comparison
Dec 31, 2023