Otis Worldwide Corp (OTIS)
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 | 2,008,000 | 2,186,000 | 2,033,000 | 2,108,000 | 1,639,000 |
| Long-term debt | US$ in thousands | 6,973,000 | 6,866,000 | 6,098,000 | 7,249,000 | 5,262,000 |
| Total stockholders’ equity | US$ in thousands | -4,848,000 | -4,924,000 | -4,870,000 | -3,625,000 | -3,862,000 |
| Return on total capital | 94.49% | 112.56% | 165.55% | 58.17% | 117.07% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $2,008,000K ÷ ($6,973,000K + $-4,848,000K)
= 94.49%
The return on total capital for Otis Worldwide Corp has displayed significant fluctuations over the years, ranging from exceptional highs to more moderate levels. In 2020, the return on total capital was particularly impressive at 117.07%, indicating efficient utilization of both debt and equity to generate profits. This was followed by a noticeable decrease in 2021 to 58.17%, suggesting a potential shift in capital efficiency strategies.
However, the company rebounded strongly in 2022 with a return on total capital of 165.55%, surpassing even the performance seen in 2020. This exceptional result likely signifies effective capital allocation and operational management. In 2023, the return on total capital maintained a relatively high level at 112.56%, demonstrating sustained financial performance.
By 2024, the return on total capital decreased to 94.49%, indicating a slight decline in capital efficiency compared to the preceding years. Nonetheless, this figure still represents a respectable return on the total capital employed by Otis Worldwide Corp.
In summary, Otis Worldwide Corp has exhibited varying levels of return on total capital over the years, with some years showcasing exceptional performance and others reflecting more moderate results. This trend underscores the importance of continuously monitoring and optimizing capital utilization for sustainable financial success.
Peer comparison
Dec 31, 2024