Otis Worldwide Corp (OTIS)
Return on total capital
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 2,008,000 | 1,999,000 | 2,207,000 | 2,217,000 | 2,186,000 | 2,155,000 | 2,113,000 | 2,020,000 | 2,033,000 | 2,038,000 | 2,051,000 | 2,125,000 | 2,108,000 | 2,052,000 | 1,964,000 | 1,819,000 | 1,605,000 |
| Long-term debt | US$ in thousands | 6,973,000 | 5,596,000 | 5,526,000 | 6,846,000 | 6,866,000 | 6,822,000 | 6,117,000 | 6,116,000 | 6,098,000 | 6,459,000 | 6,602,000 | 6,694,000 | 7,249,000 | 5,458,000 | 5,457,000 | 5,457,000 | 5,262,000 |
| Total stockholders’ equity | US$ in thousands | -4,848,000 | -4,901,000 | -5,046,000 | -5,024,000 | -4,924,000 | -4,788,000 | -4,852,000 | -4,857,000 | -4,870,000 | -4,913,000 | -4,997,000 | -5,029,000 | -3,625,000 | -3,854,000 | -3,856,000 | -3,910,000 | -3,862,000 |
| Return on total capital | 94.49% | 287.63% | 459.79% | 121.68% | 112.56% | 105.95% | 167.04% | 160.44% | 165.55% | 131.82% | 127.79% | 127.63% | 58.17% | 127.93% | 122.67% | 117.58% | 114.64% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $2,008,000K ÷ ($6,973,000K + $-4,848,000K)
= 94.49%
Otis Worldwide Corp has shown fluctuating trends in its return on total capital over the period from December 31, 2020, to December 31, 2024. The return on total capital increased from 114.64% in December 2020 to a peak of 167.04% in June 2023, reflecting the company's ability to generate profits from its invested capital effectively.
However, there was a significant decrease in the return on total capital to 94.49% by December 2024. This decline may indicate a potential inefficiency in how the company is utilizing its total capital to generate returns during that period.
It is crucial for Otis Worldwide Corp to monitor and manage its return on total capital to ensure sustained profitability and efficiency in allocating capital for future growth and operational performance. Further analysis of the company's financial strategies and operational efficiencies may be necessary to address the fluctuations observed in the return on total capital.
Peer comparison
Dec 31, 2024