Adapthealth Corp (AHCO)

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	263,732	-597,596	203,499	284,176	-132,157
Long-term debt	US$ in thousands	1,964,920	2,094,610	2,153,270	2,183,550	776,568
Total stockholders’ equity	US$ in thousands	1,571,140	1,458,450	2,151,160	2,061,910	354,889
Return on total capital		7.46%	-16.82%	4.73%	6.69%	-11.68%

December 31, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $263,732K ÷ ($1,964,920K + $1,571,140K)
= 7.46%

Return on total capital is a key financial metric that shows the efficiency with which a company utilizes its capital to generate profits. Analyzing Adapthealth Corp's return on total capital reveals fluctuations over the years:

1. December 31, 2020: The company reported a negative return on total capital of -11.68%. This indicates that Adapthealth Corp's capital utilization resulted in a loss during this period.

2. December 31, 2021: The return on total capital improved to 6.69%, suggesting a better utilization of capital to generate profits compared to the previous year.

3. December 31, 2022: The return on total capital slightly decreased to 4.73%, indicating a dip in efficiency in capital utilization compared to the previous year.

4. December 31, 2023: The return on total capital significantly dropped to -16.82%, signaling a substantial decline in the company's ability to generate profits from its capital investments.

5. December 31, 2024: The return on total capital rebounded to 7.46%, showing an improvement in capital utilization and profitability compared to the prior year.

Overall, Adapthealth Corp's return on total capital has shown fluctuating performance over the years, with both positive and negative trends. It is essential for the company to analyze the factors influencing these fluctuations and work towards consistently improving its capital efficiency for sustained profitability.