Sonoco Products Company (SON)
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 | 760,923 | 686,608 | -88,916 | 335,539 | 451,899 |
| Long-term debt | US$ in thousands | 3,035,870 | 2,719,780 | 1,199,110 | 1,244,440 | 1,193,140 |
| Total stockholders’ equity | US$ in thousands | 2,424,340 | 2,065,810 | 1,837,440 | 1,899,600 | 1,802,680 |
| Return on total capital | 13.94% | 14.35% | -2.93% | 10.67% | 15.08% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $760,923K ÷ ($3,035,870K + $2,424,340K)
= 13.94%
Sonoco Products Co.'s return on total capital has shown a declining trend over the past five years, starting at 15.27% in 2019 and gradually decreasing to 12.79% in 2023. This indicates that the company's efficiency in generating returns from its total capital has decreased over the period. It is essential for the company to assess factors affecting its return on total capital, such as profitability, operational efficiency, and capital structure, to improve performance and enhance shareholder value. Further in-depth analysis and comparison with industry benchmarks may provide insights into areas for potential improvement and strategic decision-making.
Peer comparison
Dec 31, 2023