Stepan Company (SCL)

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	58,613	207,336	170,781	171,522	127,260
Long-term debt	US$ in thousands	401,248	455,029	322,862	160,812	198,532
Total stockholders’ equity	US$ in thousands	1,216,490	1,166,060	1,074,190	986,693	891,783
Return on total capital		3.62%	12.79%	12.22%	14.95%	11.67%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $58,613K ÷ ($401,248K + $1,216,490K)
= 3.62%

Stepan Co.'s return on total capital has shown a declining trend over the past five years, starting at 13.03% in 2019 and decreasing to 4.12% by the end of 2023.
The return on total capital peaked at 15.41% in 2020 before gradually decreasing in the subsequent years.
This downward trend could indicate declining efficiency in generating profits relative to the total capital employed by the company.
Further analysis is recommended to determine the reasons behind this trend and assess the sustainability of Stepan Co.'s overall financial performance.

Peer comparison

Dec 31, 2023

Company name

Symbol

Return on total capital

Stepan Company

SCL

3.62%

Church & Dwight Company Inc

Procter & Gamble Company

24.46%