NOV Inc. (NOV)
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 | 708,000 | 316,000 | -158,000 | -2,700,000 | -6,364,000 |
| Long-term debt | US$ in thousands | 1,712,000 | 1,717,000 | 1,708,000 | 1,834,000 | 1,989,000 |
| Total stockholders’ equity | US$ in thousands | 6,168,000 | 5,096,000 | 4,997,000 | 5,210,000 | 7,778,000 |
| Return on total capital | 8.98% | 4.64% | -2.36% | -38.33% | -65.16% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $708,000K ÷ ($1,712,000K + $6,168,000K)
= 8.98%
NOV Inc's return on total capital has shown improvement over the past five years. The return on total capital increased from -4.69% in 2019 to 9.47% in 2023, indicating a positive trend in the company's ability to generate returns on its total capital employed.
The company's return on total capital turned positive in 2021 after two consecutive years of negative returns. This positive trend continued with further improvement in 2022 and 2023, signifying better utilization of capital resources.
Overall, the increasing trend in NOV Inc's return on total capital reflects improved efficiency in capital allocation and potentially stronger profitability in recent years. However, further analysis and comparison with industry benchmarks would provide a more comprehensive evaluation of the company's performance.
Peer comparison
Dec 31, 2023