Addus HomeCare Corporation (ADUS)

Return on total capital

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	105,496	107,053	102,611	97,786	92,432	84,869	79,049	74,221	69,078	67,708	67,506	67,583	66,204	58,432	53,645	46,328	45,131	48,324	43,261	40,985
Long-term debt	US$ in thousands	218,443	—	—	99,347	124,132	163,917	78,702	108,487	131,772	163,557	196,342	256,127	220,912	220,707	193,714	193,839	193,901	59,561	59,048	59,112
Total stockholders’ equity	US$ in thousands	970,492	947,634	921,655	725,143	706,694	684,334	666,351	648,886	633,540	614,837	599,777	585,778	574,344	558,051	544,055	529,910	518,676	507,600	494,861	486,808
Return on total capital		8.87%	11.30%	11.13%	11.86%	11.13%	10.01%	10.61%	9.80%	9.03%	8.70%	8.48%	8.03%	8.32%	7.50%	7.27%	6.40%	6.33%	8.52%	7.81%	7.51%

December 31, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $105,496K ÷ ($218,443K + $970,492K)
= 8.87%

The return on total capital for Addus HomeCare Corporation demonstrates fluctuating performance over the analyzed periods. The ratio ranged from a low of 6.33% in December 31, 2020, to a high of 11.86% in March 31, 2024. Overall, the trend shows a general upward trajectory from 7.51% in March 31, 2020, to 8.87% in December 31, 2024, with intermittent peaks and troughs in between.

The company's return on total capital peaked at 11.86% in March 31, 2024, indicating that for every dollar of total capital employed, the company generated a return of 11.86 cents. However, the ratio experienced a notable decline to 8.87% by December 31, 2024, suggesting a potential decrease in the efficiency of the company in generating returns from its total capital employed.

It is essential for stakeholders to closely monitor fluctuations in the return on total capital as it reflects the company's ability to generate profits relative to the total capital invested. The company should strive for sustained improvement in this ratio to ensure optimal utilization of its capital resources and enhance overall profitability.