Pitney Bowes Inc (PBI)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -306,057 | 129,860 | 84,613 | -67,501 | 292,102 |
| Long-term debt | US$ in thousands | 2,087,100 | 2,172,500 | 2,299,100 | 2,348,360 | 2,719,610 |
| Total stockholders’ equity | US$ in thousands | -368,576 | 60,653 | 112,632 | 70,621 | 289,154 |
| Return on total capital | -17.81% | 5.82% | 3.51% | -2.79% | 9.71% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-306,057K ÷ ($2,087,100K + $-368,576K)
= -17.81%
Pitney Bowes, Inc.'s return on total capital has exhibited a downward trend over the past five years, decreasing from 7.53% in 2019 to 4.69% in 2023. This declining trend suggests that the company's ability to generate profits from its total capital employed has weakened over the period. In 2021, the return on total capital was at its peak at 6.20%, before experiencing a drop in subsequent years.
The decreasing trend in return on total capital might indicate inefficiencies in capital utilization, increased costs, or a decline in profitability relative to the capital invested in the business. Investors and stakeholders may be concerned about the company's overall financial performance and its capacity to generate returns on the total capital employed for operations.
Further analysis of the underlying factors contributing to the declining return on total capital, such as changes in revenue, expenses, or asset management efficiencies, would be essential to understand the dynamics driving this trend and to formulate strategies for improving the company's financial performance.