Warner Bros Discovery Inc (WBD)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -1,689,000 | -7,257,000 | 1,875,000 | 2,240,000 | 2,827,000 |
| Long-term debt | US$ in thousands | 40,500,000 | 38,000,000 | 14,420,000 | 15,069,000 | 14,810,000 |
| Total stockholders’ equity | US$ in thousands | 45,226,000 | 47,095,000 | 11,599,000 | 10,464,000 | 9,891,000 |
| Return on total capital | -1.97% | -8.53% | 7.21% | 8.77% | 11.44% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-1,689,000K ÷ ($40,500,000K + $45,226,000K)
= -1.97%
Warner Bros. Discovery Inc's return on total capital has shown a downward trend over the past five years. The return on total capital was positive in 2019 at 12.60%, indicating efficient utilization of capital to generate profits. However, this metric saw a decline in 2020 to 10.15% and further dropped to 7.42% in 2021. The trend continued to worsen with negative returns in 2022 at -3.80% and in 2023 at -1.00%.
The negative return on total capital in 2022 and 2023 suggests that the company's capital was not effectively deployed to generate profits during those years. This declining trend may raise concerns about the company's ability to generate returns on the capital invested, indicating potential inefficiencies in the utilization of resources. Further analysis of the factors contributing to this decline is warranted to identify areas for improvement in capital allocation and operational performance.
Peer comparison
Dec 31, 2023