Xylem Inc (XYL)
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 | 1,009,000 | 684,000 | 490,000 | 587,000 | 362,000 |
| Long-term debt | US$ in thousands | 1,978,000 | 2,268,000 | 1,880,000 | 2,440,000 | 2,484,000 |
| Total stockholders’ equity | US$ in thousands | 10,642,000 | 10,166,000 | 3,494,000 | 3,218,000 | 2,968,000 |
| Return on total capital | 8.00% | 5.50% | 9.12% | 10.37% | 6.64% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,009,000K ÷ ($1,978,000K + $10,642,000K)
= 8.00%
The return on total capital for Xylem Inc has exhibited some fluctuations over the years. In 2020, the return on total capital was at 6.64%, indicating that for every dollar of total capital employed, the company generated a return of 6.64 cents.
There was a notable improvement in 2021, with the return on total capital increasing to 10.37%, showcasing the company's ability to efficiently utilize its total capital to generate returns for its stakeholders.
In 2022, despite a slight dip to 9.12%, Xylem Inc continued to demonstrate solid performance in utilizing its total capital effectively. The following year, the return on total capital decreased to 5.50%, suggesting potential challenges in optimizing capital resources for profitability.
However, by 2024, there was a recovery in the return on total capital, reaching 8.00%. This indicates that Xylem Inc managed to enhance its capital utilization efficiency compared to the previous year.
Overall, while there have been fluctuations in the return on total capital for Xylem Inc, the company has shown a generally positive trend in generating returns from its total capital base over the years. It is important for the company to continue monitoring and optimizing its capital allocation strategies to maintain and improve its financial performance in the future.
Peer comparison
Dec 31, 2024