Smith AO Corporation (AOS)
Return on total capital
| 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 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 745,500 | 328,000 | 296,300 | 250,300 | 233,100 | 655,800 | 676,100 | 660,900 | 629,900 | 599,600 | 571,100 | 508,400 | 451,200 | 416,300 | 393,300 | 439,400 | 483,100 | 521,700 | 539,300 | 552,100 |
| Long-term debt | US$ in thousands | 117,300 | 119,600 | 196,000 | 330,800 | 334,500 | 281,000 | 291,600 | 288,600 | 189,900 | 99,600 | 99,600 | 99,600 | 106,400 | 107,100 | 274,300 | 335,600 | 277,200 | 312,400 | 351,800 | 277,600 |
| Total stockholders’ equity | US$ in thousands | 1,844,400 | 1,882,400 | 1,888,400 | 1,790,200 | 1,747,700 | 1,747,800 | 1,792,500 | 1,808,900 | 1,832,200 | 1,896,500 | 1,816,300 | 1,849,000 | 1,848,300 | 1,747,100 | 1,658,100 | 1,616,300 | 1,666,800 | 1,656,200 | 1,725,100 | 1,749,200 |
| Return on total capital | 38.00% | 16.38% | 14.22% | 11.80% | 11.19% | 32.32% | 32.44% | 31.51% | 31.15% | 30.04% | 29.81% | 26.09% | 23.08% | 22.45% | 20.35% | 22.51% | 24.85% | 26.50% | 25.97% | 27.24% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $745,500K ÷ ($117,300K + $1,844,400K)
= 38.00%
A.O. Smith Corp.'s return on total capital has shown a positive trend over the past 8 quarters, with values ranging from 30.85% to 38.41%. This indicates that the company is generating strong returns relative to the total capital invested in its operations. The consistent increase in return on total capital demonstrates the company's ability to effectively utilize its capital to generate profits. Investors and stakeholders may view this trend positively as it suggests efficient capital management and overall financial health of the company. It is essential for the company to sustain or improve this trend to ensure long-term profitability and value creation for shareholders.
Peer comparison
Dec 31, 2023