Stanley Black & Decker Inc (SWK)
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 | 739,700 | 177,600 | 370,600 | 1,768,400 | 1,665,100 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 8,719,900 | 9,056,100 | 9,712,100 | 11,590,500 | 11,059,600 |
| Return on total capital | 8.48% | 1.96% | 3.82% | 15.26% | 15.06% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $739,700K ÷ ($—K + $8,719,900K)
= 8.48%
Stanley Black & Decker Inc's return on total capital has shown fluctuations over the past few years.
As of December 31, 2020, the return on total capital was 15.06%, indicating that the company was generating a healthy return on the total capital employed in its operations. The return slightly improved to 15.26% by December 31, 2021, suggesting continued efficiency in utilizing its total capital to generate profits.
However, there was a significant decline in the return on total capital to 3.82% by December 31, 2022, signifying a potential decrease in the company's profitability relative to its capital base. This decrease further continued to 1.96% by December 31, 2023, highlighting a concerning trend of lower returns on the capital employed.
Fortunately, by December 31, 2024, the return on total capital showed recovery, rising to 8.48%. While this improvement is positive, it is essential for Stanley Black & Decker Inc to closely monitor and manage its capital allocation and operational efficiency to ensure sustainable and consistent returns for its stakeholders in the future.
Peer comparison
Dec 31, 2024