Sonoco Products Company (SON)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 236,106 | 751,518 | 789,887 | -96,991 | 330,638 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 2,271,610 | 2,424,340 | 2,072,800 | 1,849,540 | 1,910,530 |
| Return on total capital | 10.39% | 31.00% | 38.11% | -5.24% | 17.31% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $236,106K ÷ ($—K + $2,271,610K)
= 10.39%
Sonoco Products Company's return on total capital has demonstrated significant fluctuations over the past five years. In 2020, the company achieved a return of 17.31%, indicating efficient utilization of its capital to generate profits. However, this trend reversed in 2021 as the return dropped to -5.24%, implying a period of capital inefficiency and potential financial challenges.
The following year, in 2022, Sonoco rebounded strongly with a return of 38.11%, showcasing improved capital utilization and profitability. This positive momentum continued into 2023 with a return of 31.00%, reflecting sustained effectiveness in deploying capital for operations.
Nevertheless, in 2024, the return on total capital decreased to 10.39%, suggesting a potential slowdown or challenges in generating profits relative to the capital invested.
Overall, Sonoco Products Company's return on total capital has exhibited mixed performance over the five-year period, highlighting the need for continuous monitoring and strategic decision-making to optimize capital efficiency and enhance profitability.
Peer comparison
Dec 31, 2024