O-I Glass Inc (OI)
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 | 391,000 | 1,001,000 | 532,000 | 603,000 | 29,000 |
| Long-term debt | US$ in thousands | 4,698,000 | 4,371,000 | 4,753,000 | 4,945,000 | 5,435,000 |
| Total stockholders’ equity | US$ in thousands | 1,609,000 | 1,417,000 | 720,000 | 297,000 | 467,000 |
| Return on total capital | 6.20% | 17.29% | 9.72% | 11.50% | 0.49% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $391,000K ÷ ($4,698,000K + $1,609,000K)
= 6.20%
O-I Glass Inc's return on total capital has exhibited fluctuations over the past five years. In 2023, the return on total capital decreased to 6.20%, a substantial decline from the previous year's high of 17.29% in 2022. This decline suggests that the company may be experiencing challenges in generating profits relative to the amount of capital invested. Furthermore, the return on total capital in 2023 is lower than the returns reported in 2021 and 2020, indicating a decline in efficiency in utilizing both debt and equity to generate profits. However, it is notably higher compared to the return in 2019, signifying an improvement in capital efficiency over the longer term. Overall, the varying trend in O-I Glass Inc's return on total capital highlights the importance of carefully monitoring the company's capital utilization and profitability metrics to assess its financial performance.