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