Valero Energy Corporation (VLO)

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	4,254,000	11,958,000	15,869,000	2,146,000	-1,447,000
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	24,512,000	26,346,000	23,561,000	18,430,000	18,801,000
Return on total capital		17.35%	45.39%	67.35%	11.64%	-7.70%

December 31, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $4,254,000K ÷ ($—K + $24,512,000K)
= 17.35%

Valero Energy Corporation's return on total capital has shown significant fluctuations over the years, reflecting changes in the company's efficiency in generating returns from both debt and equity capital. The return on total capital was negative at -7.70% as of December 31, 2020, indicating that the company's capital utilization was not optimal during that period.

However, there was a substantial improvement in the return on total capital to 11.64% by December 31, 2021, suggesting that Valero Energy Corporation was able to better utilize its capital resources to generate returns for its investors.

The return on total capital further surged to 67.35% by December 31, 2022, indicating a significant increase in the company's efficiency in deploying capital to generate profits. This sharp rise may suggest improved operational performance or strategic capital allocation decisions by the company during that period.

In the subsequent years, the return on total capital remained relatively high compared to the initial years, with values of 45.39% as of December 31, 2023, and 17.35% by December 31, 2024. These figures indicate that Valero Energy Corporation continued to maintain relatively strong returns on its total capital, showcasing sustained efficiency in utilizing both debt and equity capital to drive profitability.

Overall, the fluctuating trend in Valero Energy Corporation's return on total capital underscores the dynamic nature of the company's capital management and operational performance, with significant improvements witnessed over the years, potentially reflecting enhanced strategic decision-making and operational efficiency within the organization.