Resideo Technologies Inc (REZI)
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 | 547,000 | 611,000 | 401,000 | 164,000 | 140,000 |
| Long-term debt | US$ in thousands | 1,396,000 | 1,404,000 | 1,220,000 | 1,155,000 | 1,158,000 |
| Total stockholders’ equity | US$ in thousands | 2,749,000 | 2,529,000 | 2,252,000 | 1,993,000 | 1,602,000 |
| Return on total capital | 13.20% | 15.54% | 11.55% | 5.21% | 5.07% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $547,000K ÷ ($1,396,000K + $2,749,000K)
= 13.20%
The return on total capital for Resideo Technologies Inc has shown a fluctuating trend over the past five years. The return on total capital was 7.34% in 2019, increased to 8.01% in 2020, further improved to 13.29% in 2021, and peaked at 13.85% in 2022. However, there was a slight decrease in the return on total capital to 12.01% in 2023.
Overall, the company has demonstrated an ability to generate a reasonable return on its total capital employed, with the highest returns observed in 2022 and 2021. The slight decrease in 2023 could be attributed to various factors such as changes in operating performance, capital structure, or economic conditions. Further analysis is recommended to understand the drivers behind the fluctuation in the return on total capital and to assess the sustainability of the company's performance.