Valaris Ltd (VAL)
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 | 455,000 | 153,100 | 270,200 | -4,401,400 | -4,818,600 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 2,238,500 | 1,987,600 | 1,297,900 | 1,060,800 | 4,374,600 |
| Return on total capital | 20.33% | 7.70% | 20.82% | -414.91% | -110.15% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $455,000K ÷ ($—K + $2,238,500K)
= 20.33%
Based on the provided data, the return on total capital for Valaris Ltd has shown significant fluctuations over the years.
1. As of December 31, 2020, the return on total capital was at a concerning level of -110.15%, indicating the company's capital may have been mismanaged or unproductive during that period.
2. By December 31, 2021, the return on total capital deteriorated further to -414.91%, suggesting severe financial challenges or inefficiencies in the utilization of company resources.
3. However, there was a notable turnaround by December 31, 2022, with a return on total capital of 20.82%, indicating the company may have implemented strategies to improve its capital efficiency and profitability.
4. The trend continued into December 31, 2023, with a return on total capital of 7.70%, although slightly lower than the previous year, still showing positive performance in capital management.
5. By December 31, 2024, the return on total capital increased to 20.33%, reflecting a solid improvement in utilizing total capital to generate returns for the company.
In conclusion, Valaris Ltd experienced significant fluctuations in its return on total capital over the years, with a notable recovery in recent periods. This analysis suggests that the company has been actively working on enhancing capital efficiency and performance to deliver better returns to its stakeholders.
Peer comparison
Dec 31, 2024