Owens Corning Inc (OC)
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 | 1,673,000 | 1,723,000 | 1,440,000 | -122,000 | 722,000 |
| Long-term debt | US$ in thousands | 2,615,000 | 2,992,000 | 2,960,000 | 3,126,000 | 2,986,000 |
| Total stockholders’ equity | US$ in thousands | 5,166,000 | 4,575,000 | 4,296,000 | 3,901,000 | 4,631,000 |
| Return on total capital | 21.50% | 22.77% | 19.85% | -1.74% | 9.48% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,673,000K ÷ ($2,615,000K + $5,166,000K)
= 21.50%
Owens Corning's return on total capital has shown a positive trend over the past five years. The company's return on total capital was 21.09% in 2023, a decrease from 22.56% in 2022 but still higher than the figures in the preceding years. This indicates that Owens Corning has been able to effectively generate profit from its total capital investments compared to previous years.
The upward trend in the return on total capital from 2019 (10.83%) to 2023 (21.09%) suggests an improvement in the company's overall capital utilization efficiency and profitability. This may be attributed to better operational performance, strategic investments, or efficient cost management practices.
Overall, Owens Corning's consistent improvement in return on total capital reflects positively on the company's ability to generate returns for both debt and equity holders, indicating effective capital allocation and operational performance.