Owens Corning Inc (OC)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,134,000 | 1,673,000 | 1,723,000 | 1,440,000 | -122,000 |
| Long-term debt | US$ in thousands | 5,116,000 | 2,615,000 | 2,992,000 | 2,960,000 | 3,126,000 |
| Total stockholders’ equity | US$ in thousands | 5,077,000 | 5,166,000 | 4,575,000 | 4,296,000 | 3,901,000 |
| Return on total capital | 11.13% | 21.50% | 22.77% | 19.85% | -1.74% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,134,000K ÷ ($5,116,000K + $5,077,000K)
= 11.13%
Owens Corning Inc's return on total capital has shown significant variability over the past five years. It stood at -1.74% as of December 31, 2020, indicating a negative return on the company's total invested capital. This could be a concerning sign as it suggests the company may not be generating sufficient returns on the capital employed.
However, there has been a notable improvement in subsequent years. The return on total capital increased to 19.85% as of December 31, 2021, reflecting a strong turnaround in performance. This positive trend continued in 2022, with the return on total capital rising to 22.77%, indicating that Owens Corning was effectively utilizing its capital to generate higher returns.
Although there was a slight dip in 2023, with the return on total capital decreasing to 21.50%, the figure remained relatively high compared to the initial years. In 2024, the return on total capital further declined to 11.13%, suggesting a decrease in the efficiency of capital utilization or a potential slowdown in the company's profitability.
Overall, Owens Corning Inc's return on total capital has displayed a mixed performance over the period, with fluctuations that may warrant further investigation into the factors influencing the company's capital efficiency and profitability.