Murphy Oil Corporation (MUR)

Return on total capital

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 571,367 744,490 955,710 902,326 1,033,441 1,157,560 1,542,629 1,942,362 1,601,020 1,588,444 1,038,833 487,176 277,658 -182,700 -682,533 -1,061,929 -1,362,068 -1,243,204 -738,685 -193,545
Long-term debt US$ in thousands — — — — — — — — — — — — — — — — — — — —
Total stockholders’ equity US$ in thousands 5,341,840 5,249,740 5,323,720 5,303,990 5,549,650 5,340,030 5,234,310 5,137,600 4,994,800 4,708,940 4,312,800 4,032,840 4,320,800 3,949,510 3,880,600 3,935,190 4,394,100 4,343,440 4,568,540 4,886,150
Return on total capital 10.70% 14.18% 17.95% 17.01% 18.62% 21.68% 29.47% 37.81% 32.05% 33.73% 24.09% 12.08% 6.43% -4.63% -17.59% -26.99% -31.00% -28.62% -16.17% -3.96%

December 31, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $571,367K ÷ ($—K + $5,341,840K)
= 10.70%

Murphy Oil Corporation's return on total capital has shown a fluctuating trend over the past few years. The company experienced negative returns on total capital from March 2020 to December 2021, ranging from -3.96% to -31.00%. This indicates that the company may have struggled to generate sufficient returns relative to its total capital employed during this period.

However, the situation improved from March 2022 onwards, with the return on total capital turning positive. The company's return on total capital increased steadily, reaching its peak at 37.81% as of March 31, 2023. This significant improvement suggests that Murphy Oil Corporation became more efficient in utilizing its total capital to generate returns for its shareholders.

Although there was a slight decline in the return on total capital in the subsequent periods, ranging from 10.70% to 21.68% as of December 31, 2024, the overall trend indicates an upward trajectory in the company's performance in terms of capital efficiency. Investors may view this positive trend as a good sign of the company's ability to generate returns on the capital invested in its operations.