Viatris Inc (VTRS)
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 | -73,200 | 777,800 | 3,405,600 | -28,200 | -227,900 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 18,635,500 | 20,467,400 | 21,072,300 | 20,492,700 | 22,954,100 |
| Return on total capital | -0.39% | 3.80% | 16.16% | -0.14% | -0.99% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-73,200K ÷ ($—K + $18,635,500K)
= -0.39%
Viatris Inc's return on total capital has shown fluctuations over the past five years. The return on total capital was negative in December 2020 and 2021, indicating that the company's capital utilization was not generating sufficient returns during those periods.
However, there was a significant improvement in the return on total capital in December 2022, reaching 16.16%. This suggests that Viatris Inc was able to effectively allocate and utilize its capital to generate positive returns for its stakeholders in that year.
In December 2023, the return on total capital decreased to 3.80%, indicating a slight decrease in the company's capital efficiency compared to the previous year.
Moreover, in December 2024, the return on total capital became negative again at -0.39%, signifying a potential decline in the company's ability to generate returns on its total capital.
Overall, Viatris Inc's return on total capital has displayed fluctuations, with significant improvements in some years but decreases in others. It is essential for the company to consistently assess and enhance its capital allocation strategies to ensure sustainable and positive returns on total capital in the future.
Peer comparison
Dec 31, 2024