Xerox Corp (XRX)
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 | -991,000 | 170,000 | -126,000 | -265,000 | 471,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,076,000 | 2,538,000 | 3,343,000 | 4,436,000 | 5,592,000 |
| Return on total capital | -92.10% | 6.70% | -3.77% | -5.97% | 8.42% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-991,000K ÷ ($—K + $1,076,000K)
= -92.10%
Xerox Corp's return on total capital has displayed significant fluctuations over the past five years. In 2020, the return on total capital stood at a respectable 8.42%, indicating efficient utilization of both equity and debt to generate profits. However, a sharp decline was observed in 2021, with a negative return of -5.97%, suggesting potential operational challenges or inefficiencies during that period.
Furthermore, the downward trend continued in 2022, where the return on total capital deteriorated further to -3.77%, highlighting persistent issues regarding the company's capital efficiency and profitability. The subsequent year, 2023, witnessed an improvement in performance, as the return on total capital rebounded to 6.70%, indicating efforts to address previous shortcomings and enhance capital utilization.
However, the most recent data for 2024 reveals a drastic decline in the return on total capital to -92.10%, which is a cause for significant concern. Such a substantial negative return signifies major challenges and potential financial distress within the company, raising questions about its ability to effectively deploy capital and generate returns for shareholders.
Overall, the fluctuating nature of Xerox Corp's return on total capital over the past five years underscores the importance of closely monitoring and addressing factors impacting capital efficiency and profitability to ensure sustainable financial performance in the future.
Peer comparison
Dec 31, 2024