United Parcel Service Inc (UPS)
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 | 8,308,000 | 9,348,000 | 13,817,000 | 12,868,000 | 7,668,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 16,718,000 | 17,306,000 | 19,786,000 | 14,253,000 | 741,000 |
| Return on total capital | 49.69% | 54.02% | 69.83% | 90.28% | 1,034.82% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $8,308,000K ÷ ($—K + $16,718,000K)
= 49.69%
The return on total capital for United Parcel Service Inc has displayed a significant decline over the past five years, starting at an exceptionally high level of 1,034.82% in December 2020 and gradually decreasing to 49.69% by December 2024. Despite the substantial decrease, the company is still generating a positive return on its total capital, though at a much lower rate compared to the initial period. This downward trend may indicate changes in the company's capital allocation strategies or efficiency in utilizing its total capital for generating profits. Further analysis of the company's financial performance and operational efficiency may be required to understand the factors driving this decline in return on total capital.