Applied Industrial Technologies (AIT)
Return on total capital
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 518,674 | 474,601 | 356,575 | 207,869 | 92,500 |
| Long-term debt | US$ in thousands | 572,279 | 596,926 | 649,150 | 784,855 | 855,143 |
| Total stockholders’ equity | US$ in thousands | 1,688,780 | 1,458,440 | 1,149,360 | 932,546 | 843,542 |
| Return on total capital | 22.94% | 23.09% | 19.83% | 12.10% | 5.45% |
June 30, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $518,674K ÷ ($572,279K + $1,688,780K)
= 22.94%
The return on total capital for Applied Industrial Technologies has exhibited an increasing trend over the past five years. Specifically, the return on total capital increased from 5.45% in June 2020 to 22.94% in June 2024. This indicates that the company has been generating a higher return on the total capital employed in its operations.
A consistent improvement in the return on total capital suggests that Applied Industrial Technologies is utilizing its capital more efficiently to generate profits. This could be attributed to effective management of the company's assets and liabilities, as well as successful operational strategies.
Overall, the upward trajectory of the return on total capital portrays Applied Industrial Technologies as a company that is enhancing its financial performance and creating value for its stakeholders by maximizing returns on the capital invested in its business operations.