Astec Industries Inc (ASTE)
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 | 51,500 | 7,400 | 14,800 | 45,200 | 26,700 |
| Long-term debt | US$ in thousands | 72,000 | 78,100 | 200 | 400 | 700 |
| Total stockholders’ equity | US$ in thousands | 653,400 | 626,900 | 650,800 | 642,500 | 601,900 |
| Return on total capital | 7.10% | 1.05% | 2.27% | 7.03% | 4.43% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $51,500K ÷ ($72,000K + $653,400K)
= 7.10%
Return on total capital measures how efficiently a company is utilizing all of its capital (both debt and equity) to generate profits. Astec Industries Inc.'s return on total capital has varied over the last five years, ranging between 2.31% and 7.93%.
In 2023, the return on total capital increased significantly to 7.39%, indicating that the company was able to generate more profit relative to its total capital employed compared to the previous year. This might suggest improved efficiency in managing its resources.
Comparing the 2023 figure to the 5-year historical average, it appears to be higher than the average return on total capital over the period. This could indicate potential operational improvements or strategic decisions that have positively impacted the company's profitability and capital efficiency.
However, it is essential to consider other factors such as industry trends, economic conditions, and company-specific events to get a holistic understanding of Astec Industries Inc.'s return on total capital performance and its implications for future financial health.
Peer comparison
Dec 31, 2023