MP Materials Corp (MP)
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -17,719 | 53,375 | 150,078 | 245,349 | 327,411 | 347,121 | 322,144 | 262,359 | 169,099 | 119,617 | 81,642 | -15,416 | -34,452 |
| Long-term debt | US$ in thousands | 681,980 | 681,094 | 680,210 | 679,326 | 678,444 | 677,563 | 676,683 | 675,804 | 674,927 | 674,050 | 673,174 | 672,582 | 961 |
| Total stockholders’ equity | US$ in thousands | 1,365,780 | 1,376,070 | 1,364,930 | 1,351,800 | 1,312,630 | 1,242,310 | 1,170,740 | 1,090,370 | 1,008,730 | 954,195 | 906,625 | 875,157 | 853,877 |
| Return on total capital | -0.87% | 2.59% | 7.34% | 12.08% | 16.44% | 18.08% | 17.44% | 14.85% | 10.04% | 7.35% | 5.17% | -1.00% | -4.03% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-17,719K ÷ ($681,980K + $1,365,780K)
= -0.87%
MP Materials Corporation's return on total capital has been fluctuating over the past eight quarters. In Q1 2022, the return on total capital was at its highest at 14.75%, gradually increasing to peak at 18.08% in Q3 2022. However, the return on total capital started declining from Q4 2022 onwards, reaching a negative value of -0.87% in Q4 2023.
This downward trend in the return on total capital indicates a decrease in the company's ability to generate profits from its total capital employed. It suggests that the company may be facing challenges in utilizing its capital efficiently to generate returns for its investors and stakeholders. Further analysis and investigation into the company's operational and financial performance may be needed to identify the factors contributing to this decline and potential strategies for improvement.
Peer comparison
Dec 31, 2023