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
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
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
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.