Visteon Corp (VC)
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 | 255,000 | 183,000 | 82,000 | -12,000 | 107,000 |
| Long-term debt | US$ in thousands | 318,000 | 336,000 | 349,000 | 349,000 | 348,000 |
| Total stockholders’ equity | US$ in thousands | 1,038,000 | 675,000 | 516,000 | 387,000 | 480,000 |
| Return on total capital | 18.81% | 18.10% | 9.48% | -1.63% | 12.92% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $255,000K ÷ ($318,000K + $1,038,000K)
= 18.81%
Return on total capital is a key financial metric that indicates the ability of Visteon Corp. to generate profits from the total capital invested in the business.
Looking at the trend over the past five years, the return on total capital has been fluctuating. In 2023, Visteon Corp. achieved a return on total capital of 19.65%, which represents a significant improvement compared to the previous year. This suggests that the company has been more efficient in utilizing its total capital to generate profits.
In 2022, the return on total capital was 17.48%, showing a slight increase from the year before. In 2021, the return on total capital was 9.78%, indicating a lower efficiency in generating profits from the total capital invested. The ratio further improved in 2020 to 7.88% after a dip in 2019 when it stood at 12.60%.
Overall, the trend in return on total capital indicates that Visteon Corp. has been making progress in enhancing its capital efficiency, with the latest year demonstrating a notable improvement. This is a positive sign for the company's financial performance and indicates a potential increase in shareholder value.
Peer comparison
Dec 31, 2023