Addus HomeCare Corporation (ADUS)

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	92,432	69,078	66,204	45,131	35,701
Long-term debt	US$ in thousands	124,132	131,772	220,912	193,901	59,164
Total stockholders’ equity	US$ in thousands	706,694	633,540	574,344	518,676	475,592
Return on total capital		11.13%	9.03%	8.32%	6.33%	6.68%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $92,432K ÷ ($124,132K + $706,694K)
= 11.13%

Addus HomeCare Corporation's return on total capital has shown a positive trend over the past five years, steadily increasing from 6.49% in 2019 to 10.95% in 2023. This indicates that the company has been more efficient in generating profits from its total capital employed.

The improvement in return on total capital suggests that Addus HomeCare Corporation has been effectively utilizing its capital resources to generate returns for its stakeholders. This increase in efficiency can be attributed to better operational performance, cost management, or strategic decisions that have enhanced profitability.

Overall, the rising trend in return on total capital reflects positively on the company's financial health and management's ability to generate returns on the capital invested in the business. It indicates that Addus HomeCare Corporation has been successful in maximizing the returns to both debt and equity holders over the past years.