Tenet Healthcare Corporation (THC)
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 | 6,074,000 | 2,518,000 | 2,485,000 | 2,562,000 | 1,569,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 4,171,000 | 1,608,000 | 1,142,000 | 1,028,000 | 28,000 |
| Return on total capital | 145.62% | 156.59% | 217.60% | 249.22% | 5,603.57% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $6,074,000K ÷ ($—K + $4,171,000K)
= 145.62%
Tenet Healthcare Corporation's return on total capital has demonstrated significant fluctuations over the past five years. In 2020, the return on total capital was exceptionally high at 5,603.57%, indicating substantial profitability relative to the capital employed. This extraordinarily high return may have been influenced by specific factors or one-time events during that year.
Subsequently, in 2021, the return on total capital decreased to 249.22%, still remaining at a relatively high level but showing a significant decrease compared to the previous year. The decline in this ratio suggests a potential decrease in the company's profitability relative to its total capital in 2021.
In 2022 and 2023, the return on total capital continued to decline to 217.60% and 156.59%, respectively. These decreases indicate a trend of diminishing profitability relative to the total capital employed by the company during these years.
By the end of 2024, the return on total capital further decreased to 145.62%, marking a continued decline in the company's ability to generate profits in relation to its total capital investment.
Overall, the fluctuating trend in Tenet Healthcare Corporation's return on total capital over the five-year period indicates varying levels of profitability relative to the capital employed, with a sharp decline from the exceptionally high ratio in 2020 to more moderate levels in subsequent years. It would be important for stakeholders to further analyze the underlying reasons for these fluctuations to assess the company's financial performance and sustainability.
Peer comparison
Dec 31, 2024