Chesapeake Utilities Corporation (CPK)
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 | 152,241 | 147,984 | 132,832 | 116,801 | 108,491 |
| Long-term debt | US$ in thousands | 1,187,080 | 578,388 | 549,903 | 508,499 | 440,168 |
| Total stockholders’ equity | US$ in thousands | 1,246,100 | 832,801 | 774,130 | 697,085 | 561,577 |
| Return on total capital | 6.26% | 10.49% | 10.03% | 9.69% | 10.83% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $152,241K ÷ ($1,187,080K + $1,246,100K)
= 6.26%
Chesapeake Utilities Corp's return on total capital has exhibited some variability over the past five years. In 2023, the return on total capital was 6.12%, showing a decrease from the previous year's figure of 8.74%. This decline may indicate a decrease in the company's efficiency in generating profits from its total capital employed.
Comparing the 2023 return on total capital to earlier years, we observe fluctuations in performance. While the return on total capital in 2023 was lower than in 2022, it was also lower than the figures recorded in 2021 (8.39%), 2020 (8.07%), and 2019 (8.20%).
The downward trend in return on total capital over the period may warrant further investigation into the factors influencing the company's profitability and capital utilization. It is essential for Chesapeake Utilities Corp to carefully assess its capital allocation strategies and operational efficiency to enhance its return on total capital in the future.
Peer comparison
Dec 31, 2023