Valvoline Inc (VVV)
Return on total capital
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 247,200 | 220,300 | 240,100 | 160,200 | 398,000 |
| Long-term debt | US$ in thousands | 1,562,300 | 1,525,100 | 1,639,700 | 1,962,000 | 1,327,000 |
| Total stockholders’ equity | US$ in thousands | 203,200 | 306,600 | 134,500 | -76,000 | -257,800 |
| Return on total capital | 14.00% | 12.03% | 13.53% | 8.49% | 37.22% |
September 30, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $247,200K ÷ ($1,562,300K + $203,200K)
= 14.00%
To analyze Valvoline Inc's return on total capital over the past five years, we can observe a trend of fluctuation. In September 2023, the return on total capital was 15.65%, an increase from 11.62% in September 2022. However, this figure was lower than the return in September 2021, which stood at 27.56%. Similarly, in September 2020, the return on total capital was 24.13%, indicating a decrease from the previous year's figure of 36.99% in September 2019.
The decreasing trend in the return on total capital indicates that Valvoline Inc may be experiencing challenges in generating returns from its total capital investment. It is important for the company to closely monitor its capital utilization efficiency and seek opportunities for improving its return on total capital to ensure sustainable and profitable operations.
Peer comparison
Sep 30, 2023