Waste Management Inc (WM)
Return on total capital
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | 4,063,000 | 3,929,000 | 3,831,000 | 3,766,000 | 3,575,000 | 3,555,000 | 3,476,000 | 3,422,000 | 3,365,000 | 3,318,000 | 3,182,000 | 3,083,000 | 2,965,000 | 2,901,000 | 2,775,000 | 2,511,000 | 2,434,000 | 2,435,000 | 2,489,000 | 2,658,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 8,252,000 | 7,979,000 | 7,457,000 | 7,082,000 | 6,903,000 | 6,950,000 | 6,909,000 | 6,794,000 | 6,849,000 | 7,010,000 | 7,190,000 | 7,144,000 | 7,124,000 | 7,172,000 | 7,352,000 | 7,427,000 | 7,452,000 | 7,155,000 | 6,891,000 | 6,743,000 |
| Return on total capital | 49.24% | 49.24% | 51.37% | 53.18% | 51.79% | 51.15% | 50.31% | 50.37% | 49.13% | 47.33% | 44.26% | 43.16% | 41.62% | 40.45% | 37.74% | 33.81% | 32.66% | 34.03% | 36.12% | 39.42% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $4,063,000K ÷ ($—K + $8,252,000K)
= 49.24%
The return on total capital for Waste Management Inc has shown a generally increasing trend over the past few years, indicating improving efficiency in generating profits from capital investments. The ratio increased from 39.42% as of March 31, 2020, to a peak of 53.18% as of March 31, 2024, before experiencing a slight decline to 49.24% as of December 31, 2024.
The company's ability to generate returns from both its equity and debt capital has been strong, with a notable improvement in performance up to the first quarter of 2024. This signifies effective capital allocation and operational management by Waste Management Inc.
Investors and stakeholders can view this trend positively as it shows that the company is utilizing its capital efficiently to generate profits. However, the slight decrease in the return on total capital towards the end of 2024 may warrant further analysis to understand the underlying reasons behind this development. Overall, Waste Management Inc's return on total capital demonstrates a positive trend and reflects well on the company's financial management capabilities.
Peer comparison
Dec 31, 2024