Otis Worldwide Corp (OTIS)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 2,186,000 | 2,033,000 | 2,108,000 | 1,639,000 |
| Long-term debt | US$ in thousands | 6,866,000 | 6,098,000 | 7,249,000 | 5,262,000 |
| Total stockholders’ equity | US$ in thousands | -4,924,000 | -4,870,000 | -3,625,000 | -3,862,000 |
| Return on total capital | 112.56% | 165.55% | 58.17% | 117.07% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $2,186,000K ÷ ($6,866,000K + $-4,924,000K)
= 112.56%
The return on total capital for Otis Worldwide Corp has shown variability over the past five years. The ratio stood at 109.68% as of December 31, 2023, reflecting a significant increase from the previous year's 105.74%. This indicates that for every dollar of capital employed, Otis generated a return of approximately 109.68 cents in 2023.
In 2021, the return on total capital was 57.18%, showcasing a notable improvement from the previous year's 79.92%. However, it is worth noting that the ratio has fluctuated, with a peak of 109.05% in 2019. This suggests that the company's efficiency in generating returns from its total capital has varied over the years.
Overall, the recent increase in the return on total capital demonstrates improved capital productivity and profitability for Otis Worldwide Corp. Further analysis of the company's financial performance and operational strategies may provide insights into the factors driving these fluctuations in the return on total capital.
Peer comparison
Dec 31, 2023