United States Steel Corporation (X)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 462,000 | 1,119,000 | 3,418,000 | 4,657,000 | -1,027,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 11,347,000 | 11,047,000 | 10,218,000 | 9,010,000 | 3,786,000 |
| Return on total capital | 4.07% | 10.13% | 33.45% | 51.69% | -27.13% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $462,000K ÷ ($—K + $11,347,000K)
= 4.07%
United States Steel Corporation's return on total capital has experienced significant fluctuations over the past five years. The company reported a negative return on total capital of -27.13% as of December 31, 2020, indicating that the company was not effectively generating returns from its total capital during that period.
However, there was a substantial improvement in the company's performance in the subsequent years. By December 31, 2021, the return on total capital had surged to 51.69%, reflecting a strong rebound in the company's profitability and capital efficiency. This indicates that the company was able to generate significant returns relative to the total capital employed.
In the following years, the return on total capital remained positive but exhibited some fluctuation. By December 31, 2022, the return on total capital stood at 33.45%, indicating that the company was still performing well in terms of capital utilization. However, there was a decline in performance by December 31, 2023, with the return on total capital decreasing to 10.13%. This decline suggests a potential decrease in the company's overall capital efficiency.
As of December 31, 2024, the return on total capital further decreased to 4.07%, indicating a continued decline in the company's profitability relative to its total capital. This downward trend may raise concerns about the company's ability to generate adequate returns on its capital investments.
In conclusion, while United States Steel Corporation experienced a significant improvement in its return on total capital in the past, the recent declines raise questions about the company's capital efficiency and overall profitability. It is essential for the company to assess its capital allocation strategies and operational performance to enhance its return on total capital in the future.
Peer comparison
Dec 31, 2024