Waste Management Inc (WM)
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 | 3,575,000 | 3,365,000 | 2,965,000 | 2,434,000 | 2,706,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 6,903,000 | 6,849,000 | 7,124,000 | 7,452,000 | 7,068,000 |
| Return on total capital | 51.79% | 49.13% | 41.62% | 32.66% | 38.29% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $3,575,000K ÷ ($—K + $6,903,000K)
= 51.79%
Waste Management, Inc.'s return on total capital has shown a generally positive trend over the past five years. The company's return on total capital increased from 13.12% in 2019 to 16.27% in 2023, demonstrating an improvement in the company's ability to generate returns from its total capital employed. This indicates effective management of both debt and equity in the company's capital structure. Waste Management's consistent growth in return on total capital reflects the company's operational efficiency and profitability, which is a positive indicator for investors and stakeholders. Overall, the increasing trend in return on total capital suggests that Waste Management, Inc. has been successful in efficiently utilizing its capital to generate profitable returns for its shareholders.
Peer comparison
Dec 31, 2023