Allegion PLC (ALLE)
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 | 800,800 | 710,300 | 590,400 | 574,200 | 416,500 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,500,700 | 1,318,300 | 944,500 | 762,400 | 829,400 |
| Return on total capital | 53.36% | 53.88% | 62.51% | 75.31% | 50.22% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $800,800K ÷ ($—K + $1,500,700K)
= 53.36%
To analyze Allegion PLC's return on total capital over the period from December 31, 2020, to December 31, 2024, we observe a fluctuating trend.
- In 2020, the return on total capital was 50.22%, indicating that for every dollar of total capital invested, Allegion generated a return of 50.22 cents.
- This metric significantly improved in 2021, reaching 75.31%, showcasing the company's ability to generate higher returns relative to its capital base.
- By 2022, the return on total capital decreased to 62.51%, although still demonstrating the company's efficient capital utilization.
- In 2023, the return further decreased to 53.88%, possibly indicating some challenges in generating returns compared to the previous year.
- Finally, by the end of 2024, the return on total capital stood at 53.36%, slightly lower than in 2023 but showing consistency in generating returns above 50%.
Overall, despite some fluctuations, Allegion PLC has managed to maintain a return on total capital above 50% throughout the period, suggesting effective capital allocation and operational efficiency.