Sherwin-Williams Co (SHW)
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 | 3,527,400 | 2,963,900 | 2,583,300 | 2,859,600 | 2,331,100 |
| Long-term debt | US$ in thousands | 8,377,900 | 9,591,000 | 8,590,900 | 8,266,900 | 8,050,700 |
| Total stockholders’ equity | US$ in thousands | 3,715,800 | 3,102,100 | 2,437,200 | 3,610,800 | 4,123,300 |
| Return on total capital | 29.17% | 23.35% | 23.42% | 24.08% | 19.15% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $3,527,400K ÷ ($8,377,900K + $3,715,800K)
= 29.17%
Sherwin-Williams Co. has shown a consistent performance in terms of return on total capital over the last five years. The return on total capital has been gradually increasing from 18.94% in 2019 to 26.62% in 2023. This indicates that the company has been effectively utilizing its total capital to generate profits for its shareholders. A return on total capital above 20% is generally considered favorable as it suggests the company is efficiently utilizing its invested capital to generate earnings. Sherwin-Williams Co.'s improving trend in return on total capital reflects positively on its operational efficiency and profitability.
Peer comparison
Dec 31, 2023