TE Connectivity Ltd (TEL)
Return on total capital
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 2,354,000 | 2,800,000 | 2,440,000 | 590,000 | 1,897,000 |
| Long-term debt | US$ in thousands | 3,529,000 | 3,292,000 | 3,589,000 | 3,452,000 | 3,395,000 |
| Total stockholders’ equity | US$ in thousands | 11,551,000 | 10,897,000 | 10,748,000 | 9,495,000 | 10,570,000 |
| Return on total capital | 15.61% | 19.73% | 17.02% | 4.56% | 13.58% |
September 30, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $2,354,000K ÷ ($3,529,000K + $11,551,000K)
= 15.61%
TE Connectivity Ltd's return on total capital has fluctuated over the past five years, ranging from 4.56% in 2020 to 19.73% in 2022. The ratio decreased to 15.61% in 2023 from the previous year but remains at a healthy level. This indicates that the company has effectively utilized its total capital to generate profits for its shareholders and is performing well in terms of capital efficiency. However, the downward trend in the ratio from 2022 to 2023 may warrant further investigation into the company's capital allocation strategies and overall financial performance.
Peer comparison
Sep 30, 2023