ODP Corp (ODP)
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 | 220,000 | 246,000 | -136,000 | -252,000 | 239,000 |
| Long-term debt | US$ in thousands | — | 1,000 | 3,000 | 6,000 | — |
| Total stockholders’ equity | US$ in thousands | 1,101,000 | 1,287,000 | 1,438,000 | 1,880,000 | 2,173,000 |
| Return on total capital | 19.98% | 19.10% | -9.44% | -13.36% | 11.00% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $220,000K ÷ ($—K + $1,101,000K)
= 19.98%
The return on total capital for ODP Corp has shown fluctuations over the past five years. In 2023, the return on total capital was 19.98%, an increase from the previous year's 19.10%. This suggests that the company has been able to generate a higher return on the total capital employed in the business.
In 2021 and 2020, the return on total capital was negative, indicating that the company did not generate sufficient profits to cover the capital invested. This could be a concern for investors and creditors as it signals inefficiency in the utilization of resources.
However, the return on total capital improved significantly in 2019, reaching 11.00%, which indicates that the company was able to generate a positive return on the capital employed during that period.
Overall, the fluctuations in ODP Corp's return on total capital indicate varying levels of efficiency in utilizing its capital resources to generate profits over the years. The recent improvement in 2023 is a positive sign, but the company should continue to monitor and enhance its capital utilization efficiency for sustainable growth and profitability.
Peer comparison
Dec 31, 2023