Viatris Inc (VTRS)
Return on total capital
Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 766,200 | 1,019,400 | 1,127,800 | 1,307,300 | 1,614,900 | 1,738,600 | 1,536,100 | 939,600 | -34,000 | -837,500 | -826,100 | -1,042,000 | -1,053,400 | |||
Long-term debt | US$ in thousands | 16,188,100 | 17,076,900 | 17,246,000 | 18,069,400 | 18,015,200 | 18,724,500 | 19,206,400 | 18,762,500 | 19,717,100 | 19,854,300 | 20,917,000 | 22,102,200 | 22,429,200 | 11,535,000 | 11,385,200 | — |
Total stockholders’ equity | US$ in thousands | 20,467,400 | 20,865,600 | 20,843,300 | 20,927,900 | 21,072,300 | 19,182,300 | 19,805,400 | 20,447,700 | 20,492,700 | 21,141,300 | 21,206,900 | 21,414,700 | 22,954,100 | -201,000 | -1,000 | 0 |
Return on total capital | 2.09% | 2.69% | 2.96% | 3.35% | 4.13% | 4.59% | 3.94% | 2.40% | -0.08% | -2.04% | -1.96% | -2.39% | -2.32% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $766,200K ÷ ($16,188,100K + $20,467,400K)
= 2.09%
Analyzing Viatris Inc's return on total capital over the past eight quarters reveals a fluctuating trend. The return on total capital has ranged from a low of 2.55% in Q4 2023 to a high of 5.15% in Q3 2022. The general downward trend in return on total capital over the past two quarters may indicate potential inefficiencies in the company's capital utilization.
The declining trend from 5.15% in Q3 2022 to 2.55% in Q4 2023 suggests a possible deterioration in Viatris Inc's ability to generate returns on its total invested capital. This decreasing trend could raise concerns among investors and stakeholders about the company's operational efficiency and overall financial health.
It is essential for Viatris Inc to closely monitor and address the factors contributing to the decline in return on total capital to ensure sustainable and profitable operations. By identifying and rectifying any underlying issues affecting capital utilization efficiency, the company can work towards improving its return on total capital and enhancing shareholder value in the long run.
Peer comparison
Dec 31, 2023