NewMarket Corporation (NEU)

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	526,321	382,936	281,769	357,615	360,831
Long-term debt	US$ in thousands	643,622	1,003,740	789,853	598,848	642,941
Total stockholders’ equity	US$ in thousands	1,077,060	762,407	762,129	759,824	683,098
Return on total capital		30.59%	21.68%	18.16%	26.32%	27.21%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $526,321K ÷ ($643,622K + $1,077,060K)
= 30.59%

NewMarket Corp.'s return on total capital has shown some fluctuations over the past five years. In 2023, the return on total capital increased significantly to 27.75%, indicating an efficient use of both debt and equity to generate profits. This was a notable improvement from 2022 when the return on total capital was 19.86%.

In the earlier years, the return on total capital was 13.38% in 2021, 22.78% in 2020, and 25.23% in 2019. The company's performance in 2023 surpassed both the 5-year average and the returns achieved in 2020 and 2019.

Overall, the trend in NewMarket Corp.'s return on total capital suggests that the company has been able to generate favorable returns on the total capital employed in its operations in recent years, with the highest return observed in 2023. This indicates efficient capital allocation and management strategies within the organization.