Archrock Inc (AROC)
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 | 253,735 | 161,848 | 147,096 | 19,734 | 162,866 |
| Long-term debt | US$ in thousands | 1,584,870 | 1,548,330 | 1,530,820 | 1,688,870 | — |
| Total stockholders’ equity | US$ in thousands | 871,021 | 860,693 | 891,438 | 935,557 | 1,085,960 |
| Return on total capital | 10.33% | 6.72% | 6.07% | 0.75% | 15.00% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $253,735K ÷ ($1,584,870K + $871,021K)
= 10.33%
The return on total capital for Archrock Inc has shown a positive trend over the past five years. In 2023, the return on total capital increased to 10.52% from 6.00% in 2022, indicating a significant improvement in the company's ability to generate returns from its total invested capital. This improvement suggests that Archrock Inc has been more efficient in utilizing its total capital to generate profits for its investors.
Comparing the latest figure to the data from the previous years, we observe a fluctuating pattern with varying levels of return on total capital. While there were fluctuations, the general trend shows a positive trajectory, with returns generally increasing or remaining stable over the years.
Overall, the increasing return on total capital indicates that Archrock Inc has been effectively managing its capital investments and generating higher returns for its shareholders over time. This trend suggests improved operational efficiency and potentially reflects positively on the company's financial performance and strategic management decisions.
Peer comparison
Dec 31, 2023