ON Semiconductor Corporation (ON)
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 | 1,767,700 | 2,608,700 | 2,455,500 | 1,286,600 | 342,800 |
| Long-term debt | US$ in thousands | 3,345,900 | 2,542,600 | 3,045,700 | 2,913,900 | 2,959,700 |
| Total stockholders’ equity | US$ in thousands | 8,796,400 | 7,782,600 | 6,188,500 | 4,585,400 | 3,538,500 |
| Return on total capital | 14.56% | 25.27% | 26.59% | 17.16% | 5.28% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,767,700K ÷ ($3,345,900K + $8,796,400K)
= 14.56%
ON Semiconductor Corporation's return on total capital has exhibited fluctuations over the past five years.
- In 2020, the return on total capital was 5.28%, indicating a relatively low efficiency in generating profits from the total invested capital.
- However, the company demonstrated significant improvement in 2021, with a return on total capital of 17.16%, reflecting better utilization of capital to generate returns.
- This positive trend continued into 2022, where the return on total capital increased to 26.59%, showcasing a considerable leap in capital efficiency.
- Although there was a slight decrease in 2023 to 25.27%, the company still maintained a strong return on total capital.
- The return on total capital dipped in 2024 to 14.56%, indicating a reduction in capital efficiency compared to the previous years.
Overall, ON Semiconductor Corporation's return on total capital has shown fluctuations but generally indicates an improvement in capital efficiency, with some variation in performance over the analyzed period. It would be important for stakeholders to further investigate the underlying reasons for these fluctuations and assess the sustainability of the company's capital utilization strategy.
Peer comparison
Dec 31, 2024