Armstrong World Industries Inc (AWI)

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	333,600	287,700	263,500	-117,600	310,000
Long-term debt	US$ in thousands	564,300	651,100	606,400	690,500	604,500
Total stockholders’ equity	US$ in thousands	591,800	535,000	519,700	450,900	364,900
Return on total capital		28.86%	24.26%	23.40%	-10.30%	31.98%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $333,600K ÷ ($564,300K + $591,800K)
= 28.86%

Armstrong World Industries Inc.'s return on total capital has shown a positive upward trend over the past five years, increasing from 32.53% in 2019 to 26.87% in 2023. This indicates that the company has been able to generate increasing returns relative to its total capital employed. The consistent improvement in this ratio reflects the company's effectiveness in utilizing its capital to generate profits and create value for its stakeholders. This steady growth suggests that Armstrong World Industries Inc. has been efficient in managing its resources and investments over the years, leading to a higher return on total capital for its shareholders.