Amphastar P (AMPH)

Return on total capital

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	196,536	116,709	83,631	5,317	62,781
Long-term debt	US$ in thousands	603,174	76,642	78,185	45,923	46,324
Total stockholders’ equity	US$ in thousands	639,421	528,658	445,522	402,306	381,366
Return on total capital		15.82%	19.28%	15.97%	1.19%	14.68%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $196,536K ÷ ($603,174K + $639,421K)
= 15.82%

Amphastar Pharmaceuticals Inc's return on total capital has demonstrated variability over the past five years. The company's return on total capital was 15.86% at the end of 2023, showing a slight decrease compared to the prior year's 17.59%. However, the current figure remains relatively strong compared to 2021 and earlier when the returns were 13.34%, 2.44%, and -0.01% in 2020, 2019, and 2018, respectively.

The increasing trend in return on total capital from 2020 to 2022 indicates an improvement in the company's ability to generate profits from its total capital employed. Investors and stakeholders may view this positively as it suggests enhanced efficiency in utilizing capital resources. However, the slight decline in 2023 could be a point of concern and may warrant further investigation into the company's operational performance and capital management strategies.

Overall, the positive and mostly increasing trend in return on total capital for Amphastar Pharmaceuticals Inc indicates a generally improving efficiency in utilizing its total capital to generate returns for shareholders over the years.