Applied Industrial Technologies (AIT)
Return on total capital
| 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 | Dec 31, 2019 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 495,823 | 483,295 | 489,000 | 487,299 | 473,151 | 455,560 | 424,492 | 389,776 | 357,858 | 329,735 | 308,359 | 227,760 | 205,454 | 171,381 | 18,964 | 80,131 | 88,989 | 113,936 | 226,395 | 228,615 |
| Long-term debt | US$ in thousands | 572,279 | 571,862 | 571,854 | 596,883 | 596,926 | 597,006 | 624,052 | 649,103 | 649,150 | 681,197 | 681,266 | 730,307 | 784,855 | 773,404 | 783,076 | 792,827 | 855,143 | 864,758 | 874,423 | 859,172 |
| Total stockholders’ equity | US$ in thousands | 1,688,780 | 1,669,020 | 1,608,030 | 1,536,120 | 1,458,440 | 1,380,660 | 1,295,880 | 1,221,440 | 1,149,360 | 1,098,390 | 1,021,690 | 976,570 | 932,546 | 934,907 | 880,707 | 885,406 | 843,542 | 830,560 | 962,241 | 927,225 |
| Return on total capital | 21.93% | 21.57% | 22.43% | 22.85% | 23.02% | 23.04% | 22.11% | 20.84% | 19.90% | 18.53% | 18.11% | 13.34% | 11.96% | 10.03% | 1.14% | 4.77% | 5.24% | 6.72% | 12.33% | 12.80% |
June 30, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $495,823K ÷ ($572,279K + $1,688,780K)
= 21.93%
The return on total capital for Applied Industrial Technologies has shown a generally positive trend over the past several quarters, with the ratio ranging from 10.03% to 23.04%. The company's ability to generate returns on its total capital has been improving, reaching a peak of 23.04% in the third quarter of 2023. However, there was a slight decline in the most recent quarter, with the ratio at 21.93%.
Overall, Applied Industrial Technologies has been effectively utilizing its total capital to generate returns for its stakeholders. The upward trend in the return on total capital indicates improved efficiency in capital allocation and operational performance, which is a positive indicator of the company's financial health and profitability.