Raytheon Technologies Corp (RTX)
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 | 5,156,000 | 7,173,000 | 5,972,000 | -1,578,000 | 7,549,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 59,798,000 | 72,632,000 | 73,068,000 | 72,163,000 | 41,774,000 |
| Return on total capital | 8.62% | 9.88% | 8.17% | -2.19% | 18.07% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $5,156,000K ÷ ($—K + $59,798,000K)
= 8.62%
The return on total capital for RTX Corp has shown variability over the past five years, ranging from a low of 0.39% in 2020 to a high of 9.89% in 2019. The return on total capital is a key metric that indicates how efficiently a company is utilizing both its equity and debt capital to generate profits. The declining trend from 2019 to 2020, followed by an increase in subsequent years, suggests fluctuations in the company's ability to generate returns on the total capital invested. It is essential for RTX Corp to closely monitor and improve its capital allocation strategies to maintain and enhance its return on total capital in the future.
Peer comparison
Dec 31, 2023