Viper Energy Ut (VNOM)

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	577,783	596,200	700	292,163	-17,947
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	1,687,000	1,014,290	690,659	814,821	635,255
Return on total capital		34.25%	58.78%	0.10%	35.86%	-2.83%

December 31, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $577,783K ÷ ($—K + $1,687,000K)
= 34.25%

Based on the data provided for Viper Energy Ut, the return on total capital has shown significant fluctuations over the five-year period from 2020 to 2024.

In 2020, the return on total capital was negative at -2.83%, indicating that the company did not generate sufficient returns to cover its total capital employed. This could be a concerning sign for investors and stakeholders.

However, there was a remarkable turnaround in 2021, with the return on total capital surging to 35.86%. This indicates that the company significantly improved its efficiency in generating returns on the total capital invested, reflecting positively on its operational performance.

The following year, in 2022, the return on total capital dropped significantly to a mere 0.10%, suggesting a possible decline in the company's ability to generate profits relative to its total invested capital.

In 2023, there was a substantial improvement in the return on total capital, reaching 58.78%. This sharp increase indicates a robust performance by Viper Energy Ut in utilizing its total capital efficiently to generate profits.

Finally, in 2024, the return on total capital remained strong at 34.25%, showcasing the company's ability to sustain its profitability over time.

Overall, the fluctuations in the return on total capital for Viper Energy Ut suggest varying levels of efficiency in utilizing its total capital to generate profits during the five-year period. Further analysis and comparison with industry averages may provide deeper insights into the company's financial performance and competitiveness in the market.