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