Textron Inc (TXT)
Return on total capital
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -2,028,000 | -1,820,000 | -1,279,000 | -795,000 | -206,000 | 1,134,000 | 1,090,000 | 1,049,000 | 1,014,000 | 990,000 | 898,000 | 569,000 | 448,000 | 444,000 | 570,000 | 968,000 | 1,113,000 | 1,181,000 | 1,565,000 | 1,545,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 6,987,000 | 7,067,000 | 7,034,000 | 7,008,000 | 7,113,000 | 6,762,000 | 6,801,000 | 6,917,000 | 6,815,000 | 6,037,000 | 6,101,000 | 5,996,000 | 5,845,000 | 5,741,000 | 5,527,000 | 5,534,000 | 5,518,000 | 5,452,000 | 5,336,000 | 5,233,000 |
| Return on total capital | -29.03% | -25.75% | -18.18% | -11.34% | -2.90% | 16.77% | 16.03% | 15.17% | 14.88% | 16.40% | 14.72% | 9.49% | 7.66% | 7.73% | 10.31% | 17.49% | 20.17% | 21.66% | 29.33% | 29.52% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-2,028,000K ÷ ($—K + $6,987,000K)
= -29.03%
Textron Inc's return on total capital has shown fluctuations over the historical periods analyzed. The return on total capital was negative in the most recent quarter, indicating a loss making situation. This negative trend in returns indicates that the company may not be effectively utilizing its capital to generate profits.
Looking at the preceding quarters, Textron Inc experienced a steady decline in return on total capital from the previous year. The returns were in the positive range for a few quarters but decreased over time, hitting a low in the fourth quarter of 2021. However, there was an improvement in the returns in the first quarter of 2022, followed by a couple of quarters with consistent positive returns.
The company experienced its peak return on total capital in the first quarter of 2019, indicating a period of robust performance. However, the returns have since decreased, showing a less efficient utilization of capital to generate profits.
Overall, Textron Inc's return on total capital has been volatile, with periods of both positive and negative returns. The decreasing trend in returns signals a potential issue in capital efficiency that the company may need to address to improve its financial performance.
Peer comparison
Dec 31, 2023