Parker-Hannifin Corporation (PH)
Return on total capital
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 4,068,820 | 3,252,960 | 1,868,900 | 2,496,230 | 1,814,650 |
| Long-term debt | US$ in thousands | 8,469,740 | 8,796,280 | 9,755,820 | 6,582,050 | 7,652,260 |
| Total stockholders’ equity | US$ in thousands | 12,072,000 | 10,326,900 | 8,848,010 | 8,398,310 | 6,227,220 |
| Return on total capital | 19.81% | 17.01% | 10.05% | 16.66% | 13.07% |
June 30, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $4,068,820K ÷ ($8,469,740K + $12,072,000K)
= 19.81%
Parker-Hannifin Corporation's return on total capital has shown a positive trend over the past five years. The return on total capital increased from 13.07% in 2020 to 19.81% in 2024, indicating improved efficiency in utilizing both equity and debt to generate profits.
The company's return on total capital was relatively stable in 2021 and 2023, with figures of 16.66% and 17.01% respectively. However, there was a significant increase in 2022 to 10.05%, suggesting a temporary dip in profitability.
Overall, the trend indicates that Parker-Hannifin Corporation has been effectively managing its capital to generate returns for its shareholders and debt holders, with a notable improvement in 2024. This consistent improvement in return on total capital reflects positively on the company's financial performance and efficient capital allocation strategies.
Peer comparison
Jun 30, 2024