United Parcel Service Inc (UPS)
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 | 9,358,000 | 15,529,000 | 17,289,000 | 2,545,000 | 6,305,000 |
| Long-term debt | US$ in thousands | — | 17,321,000 | 19,784,000 | 22,031,000 | 21,818,000 |
| Total stockholders’ equity | US$ in thousands | 17,306,000 | 19,786,000 | 14,253,000 | 657,000 | 3,267,000 |
| Return on total capital | 54.07% | 41.85% | 50.79% | 11.22% | 25.13% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $9,358,000K ÷ ($—K + $17,306,000K)
= 54.07%
United Parcel Service, Inc.'s return on total capital has shown a fluctuating trend over the past five years. The return on total capital was 23.10% in 2023, a decrease from 33.19% in 2022 and 35.42% in 2021. This decline could indicate a potential decrease in the company's ability to generate profits from its total capital investment. However, the return on total capital in 2023 is still relatively strong compared to 2019 and 2020 when it was 27.36% and 30.36%, respectively. The company may need to further analyze the factors contributing to this decrease in order to maintain or improve its return on total capital in the future.