Crane Company (CR)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 365,700 | 289,700 | 281,500 | 524,100 | 257,100 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,638,700 | 1,357,800 | 1,907,100 | 1,835,100 | 1,531,100 |
| Return on total capital | 22.32% | 21.34% | 14.76% | 28.56% | 16.79% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $365,700K ÷ ($—K + $1,638,700K)
= 22.32%
Crane Company's return on total capital has shown fluctuations over the past five years. As of December 31, 2020, the return on total capital was 16.79%, indicating the company generated a respectable return relative to the total capital employed. The ratio improved significantly to 28.56% by the end of 2021, suggesting the company became more efficient in utilizing its total capital to generate profits.
However, the return on total capital declined to 14.76% by the end of 2022, signaling a decrease in the company's ability to generate profits relative to the total capital invested. This downturn was followed by a recovery in 2023, where the return on total capital increased to 21.34%. By the end of 2024, Crane Company's return on total capital further improved to 22.32%, indicating a positive trend in the company's efficiency in generating returns on the total capital employed.
Overall, Crane Company's return on total capital has shown variability over the years, with some fluctuations in efficiency in generating profits relative to the total capital invested. It is essential for the company to continue monitoring and improving its utilization of capital to sustain and enhance profitability in the future.
Peer comparison
Dec 31, 2024