Balchem Corporation (BCPC)

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	159,193	145,186	127,502	111,147	102,553
Long-term debt	US$ in thousands	326,146	440,569	122,281	174,086	256,396
Total stockholders’ equity	US$ in thousands	1,053,980	938,284	877,015	828,233	743,667
Return on total capital		11.53%	10.53%	12.76%	11.09%	10.25%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $159,193K ÷ ($326,146K + $1,053,980K)
= 11.53%

Balchem Corp.'s return on total capital has shown positive trends over the past five years, with a consistent improvement in the ratio. The return on total capital increased from 10.34% in 2019 to 11.66% in 2023. This indicates that the company is effectively utilizing its capital to generate returns for its investors.

The ratio peaked at 12.90% in 2021 before slightly decreasing in 2022 and then increasing again in 2023. The improvements in the return on total capital demonstrate the company's ability to efficiently allocate its resources and generate profits.

Overall, the upward trajectory of Balchem Corp.'s return on total capital suggests that the company has been successful in optimizing its use of capital and delivering value to its stakeholders.