Marathon Petroleum Corp (MPC)

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	14,514,000	21,469,000	4,300,000	-12,247,000	4,462,000
Long-term debt	US$ in thousands	27,000,000	26,300,000	25,100,000	31,100,000	28,300,000
Total stockholders’ equity	US$ in thousands	24,404,000	27,715,000	26,206,000	22,199,000	33,694,000
Return on total capital		28.24%	39.75%	8.38%	-22.98%	7.20%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $14,514,000K ÷ ($27,000,000K + $24,404,000K)
= 28.24%

Marathon Petroleum Corp's return on total capital has exhibited fluctuations over the past five years. The ratio stood at a robust 27.66% as of December 31, 2023, indicating a strong ability to generate returns from the total capital employed. However, this represents a decrease from the previous year's figure of 37.50%. The significant decline in 2022 suggests a potential loss in efficiency in utilizing all sources of capital effectively to generate profits.

Looking further back, the return on total capital was relatively low at 8.27% as of December 31, 2021, indicating a less effective deployment of capital to generate returns. The negative return of -6.55% as of December 31, 2020, indicates that the company incurred losses in that period relative to the total capital employed.

However, the return on total capital rebounded to a positive 10.34% as of December 31, 2019, signaling an improvement in capital efficiency compared to the previous year.

Overall, Marathon Petroleum Corp's return on total capital has shown volatility over the past five years, with fluctuations in performance and the company's ability to effectively generate returns from its total capital base. The declining trend in recent years may warrant further analysis to identify factors impacting the company's capital efficiency and profitability.