Xerox Corp (XRX)
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 | 170,000 | -126,000 | -265,000 | 471,000 | 1,768,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 2,538,000 | 3,343,000 | 4,436,000 | 5,592,000 | 5,587,000 |
| Return on total capital | 6.70% | -3.77% | -5.97% | 8.42% | 31.64% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $170,000K ÷ ($—K + $2,538,000K)
= 6.70%
The return on total capital for Xerox Holdings Corp has fluctuated over the past five years. In 2019, the company achieved a relatively high return on total capital of 11.45%, indicating efficient utilization of its total capital to generate profits. However, in subsequent years, the return on total capital saw a downward trend, with values of 4.02% in 2020, 3.63% in 2021, and 2.95% in 2022.
In 2023, there was a slight improvement in the return on total capital to 5.74%, although it still remains lower than the 2019 level. This indicates that the company may be facing challenges in optimizing its capital investments to generate higher returns for its shareholders.
Overall, the fluctuating trend in the return on total capital suggests that Xerox Holdings Corp may need to evaluate and potentially adjust its capital management strategies to enhance profitability and generate more efficient returns on its total capital in the future.
Peer comparison
Dec 31, 2023