Olin Corporation (OLN)

Return on total capital

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	740,400	917,600	1,148,600	1,500,600	1,819,900	2,070,200	2,224,600	2,052,600	1,886,700	1,437,100	200,000	-293,900	-727,300	-857,200	-70,700	53,000	206,300	384,500	597,400	699,800
Long-term debt	US$ in thousands	2,591,300	2,711,200	2,717,300	2,764,600	2,571,000	2,580,400	2,579,600	2,578,900	2,578,200	2,823,500	3,381,800	3,706,000	3,837,500	3,959,500	4,073,900	3,489,500	3,338,700	3,339,000	3,232,600	3,067,200
Total stockholders’ equity	US$ in thousands	2,232,400	2,327,500	2,432,000	2,492,800	2,543,600	2,549,700	2,696,100	2,785,900	2,652,200	2,387,900	2,074,700	1,696,600	1,450,800	1,469,100	2,188,900	2,289,100	2,417,500	2,664,700	2,770,800	2,837,600
Return on total capital		15.35%	18.21%	22.31%	28.54%	35.58%	40.35%	42.17%	38.26%	36.07%	27.58%	3.67%	-5.44%	-13.75%	-15.79%	-1.13%	0.92%	3.58%	6.40%	9.95%	11.85%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $740,400K ÷ ($2,591,300K + $2,232,400K)
= 15.35%

Olin Corp.'s return on total capital has shown a declining trend over the past eight quarters, starting at 36.63% in Q1 2022 and dropping to 15.48% in Q4 2023. This indicates a decreasing efficiency in generating profits relative to the total capital employed by the company.

The decreasing trend in return on total capital may suggest that Olin Corp. is experiencing challenges in maintaining profitability levels compared to the funds invested in its operations. This could be due to various factors such as declining revenues, increasing costs, or inefficiencies in capital allocation.

It is important for Olin Corp. to closely monitor and address the drivers behind the declining return on total capital to ensure sustainable profitability and efficient use of its capital resources. Implementing strategies to improve operational efficiency, optimize capital allocation, and enhance revenue generation could help reverse the declining trend in return on total capital.