Armstrong World Industries Inc (AWI)

Return on total capital

		Dec 31, 2024	Sep 30, 2024	Mar 31, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	358,000	375,300	350,200	333,600	336,800	312,000	295,800	287,700	272,000	267,800	274,700	263,500	243,200	245,000	232,700	-117,600	-91,300	-65,700	-49,900	310,000
Long-term debt	US$ in thousands	502,600	533,100	558,900	564,300	604,800	640,200	660,600	651,100	658,300	644,300	615,300	606,400	602,400	653,400	684,400	690,500	656,500	607,500	678,500	604,500
Total stockholders’ equity	US$ in thousands	757,100	717,000	626,800	591,800	585,500	566,700	544,800	535,000	521,200	527,800	537,600	519,700	522,200	498,300	473,600	450,900	442,600	402,900	370,400	364,900
Return on total capital		28.42%	30.02%	29.54%	28.86%	28.30%	25.85%	24.54%	24.26%	23.06%	22.85%	23.83%	23.40%	21.63%	21.27%	20.09%	-10.30%	-8.31%	-6.50%	-4.76%	31.98%

December 31, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $358,000K ÷ ($502,600K + $757,100K)
= 28.42%

Armstrong World Industries Inc's return on total capital has shown fluctuations over the past few years. Starting from a high of 31.98% in December 2019, it experienced a significant decline to -10.30% by December 2020 before gradually improving. In the most recent period up to December 2024, the return on total capital has rebounded significantly, reaching 28.42%.

Overall, the trend indicates a recovery in the return on total capital over the period analyzed, with the latest data suggesting a strong improvement in the company's efficiency in generating profits relative to its total capital employed. This upward trajectory is favorable for investors as it reflects a more efficient utilization of capital resources by Armstrong World Industries Inc. It is essential for the company to sustain this positive trend to enhance shareholder value and ensure long-term financial stability.