Materion Corporation (MTRN)
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 | 136,444 | 119,755 | 77,111 | 8,215 | 70,546 |
| Long-term debt | US$ in thousands | 387,576 | 410,876 | 434,388 | 36,542 | 1,260 |
| Total stockholders’ equity | US$ in thousands | 885,053 | 799,990 | 720,440 | 655,630 | 645,743 |
| Return on total capital | 10.72% | 9.89% | 6.68% | 1.19% | 10.90% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $136,444K ÷ ($387,576K + $885,053K)
= 10.72%
Return on total capital is a crucial ratio that indicates how effectively a company is generating profits from its overall capital investment. Materion Corp's return on total capital has shown variability over the past five years.
In 2023, Materion Corp achieved a return on total capital of 10.58%, indicating an improvement compared to the previous year's 9.71%. This suggests that the company generated $10.58 in profit for every $100 of total capital invested during the year.
In 2021 and 2020, Materion Corp's return on total capital was 6.59% and 3.84%, respectively. This indicates a lower profitability level compared to the recent years.
Notably, in 2019, Materion Corp's return on total capital was 13.19%, which was the highest among the five years analyzed. This suggests that the company was able to effectively utilize its capital resources to generate profits that year.
Overall, Materion Corp's return on total capital has displayed fluctuations over the past five years, signaling varying levels of efficiency in capital utilization and profitability. Monitoring this ratio over time can provide insights into the company's financial performance and management effectiveness.