Solventum Corp. (SOLV)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,480,000 | 1,693,000 | 1,879,000 | 1,430,000 |
| Long-term debt | US$ in thousands | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 3,409,000 | 11,742,000 | 12,059,000 | — |
| Return on total capital | 43.41% | 14.42% | 15.58% | — |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,480,000K ÷ ($—K + $3,409,000K)
= 43.41%
Solventum Corp.'s return on total capital has exhibited significant fluctuations over the past three years, reaching 43.41% at the end of 2023. This substantial increase from 14.42% in 2022 and 15.58% in 2021 indicates a notable improvement in the company's efficiency in generating profits from its total capital deployed. The exceptional return on total capital in 2023 suggests that Solventum Corp. is effectively utilizing its capital resources to generate higher returns compared to previous years. This trend reflects positively on the company's operational performance and profitability, indicating potential increased value creation for shareholders. It would be beneficial for stakeholders to further investigate the factors contributing to this significant improvement in Solventum Corp.'s return on total capital to assess the sustainability and strategic implications of this positive trend.
Peer comparison
Dec 31, 2023