Targa Resources Inc (TRGP)
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 | 2,626,200 | 1,729,000 | 864,800 | -1,303,700 | 192,900 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 2,739,700 | 2,665,700 | 2,011,800 | 2,653,900 | 4,920,800 |
| Return on total capital | 95.86% | 64.86% | 42.99% | -49.12% | 3.92% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $2,626,200K ÷ ($—K + $2,739,700K)
= 95.86%
Targa Resources Corp's return on total capital has shown improvement over the past five years. In 2019, the return on total capital was at 4.19%, but steadily increased to 12.38% in 2020, further to 13.95% in 2021, and then to 12.24% in 2022. The most recent data for December 31, 2023, demonstrates a notable growth, with the return on total capital reaching 16.80%.
This upward trend indicates that the company has been more efficient in generating returns from its total capital employed over the years. The company's ability to generate higher returns on the total capital indicates effective management of both debt and equity in funding its operations and investments. Investors and stakeholders may view this positively as it reflects the company's profitability and overall operational efficiency.
Peer comparison
Dec 31, 2023