Murphy Oil Corporation (MUR)
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 | 969,921 | 1,425,310 | 142,236 | -1,273,080 | 1,383,720 |
| Long-term debt | US$ in thousands | — | — | — | 2,988,070 | — |
| Total stockholders’ equity | US$ in thousands | 5,362,790 | 4,994,770 | 4,157,310 | 4,214,340 | 5,467,460 |
| Return on total capital | 18.09% | 28.54% | 3.42% | -17.68% | 25.31% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $969,921K ÷ ($—K + $5,362,790K)
= 18.09%
Murphy Oil Corp.'s return on total capital has shown variability over the past five years. The return on total capital was negative in 2020 at -1.43%, indicating that the company's capital was not efficiently utilized to generate profits. However, there was a significant improvement in 2021, with a return of 7.17%, indicating better capital management and potentially improved profitability.
The return on total capital increased further in 2022 to 24.81%, suggesting a significant improvement in the company's ability to generate profits relative to the overall capital invested. This strong performance continued into 2023, with a return of 16.10%, indicating that the company has been able to maintain a relatively high level of profitability compared to its invested capital.
Overall, the upward trend in return on total capital from 2019 to 2023 reflects an improvement in Murphy Oil Corp.'s efficiency in utilizing its capital to generate returns for its stakeholders. It is a positive sign for the company's financial health and potential future growth.
Peer comparison
Dec 31, 2023