Chemed Corp (CHE)

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	353,475	334,263	352,182	398,345	266,144
Long-term debt	US$ in thousands	—	92,500	185,000	—	90,000
Total stockholders’ equity	US$ in thousands	1,107,880	798,715	623,273	901,200	726,608
Return on total capital		31.91%	37.51%	43.57%	44.20%	32.59%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $353,475K ÷ ($—K + $1,107,880K)
= 31.91%

Chemed Corp.'s return on total capital has shown a declining trend over the past five years, decreasing from 32.25% in 2019 to 30.94% in 2023. This indicates that the company's efficiency in generating profits from its total capital employed has slightly diminished. However, it is important to note that the returns are still relatively high, ranging from 30.94% to 42.56% during this period, suggesting that Chemed Corp. has been effectively utilizing its total capital to generate profits compared to the industry average. It is recommended that further analysis be conducted to understand the factors contributing to this trend and to assess the company's overall financial performance in conjunction with other key financial metrics.