Carpenter Technology Corporation (CRS)

Return on total capital

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Earnings before interest and tax (EBIT)	US$ in thousands	515,700	262,600	126,600	-17,800	-264,800
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	1,887,000	1,628,800	1,396,100	1,330,500	1,392,300
Return on total capital		27.33%	16.12%	9.07%	-1.34%	-19.02%

June 30, 2025 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $515,700K ÷ ($—K + $1,887,000K)
= 27.33%

The analysis of Carpenter Technology Corporation's return on total capital over the period from June 30, 2021, to June 30, 2025, reveals a significant turnaround in operational profitability and capital efficiency.

In the fiscal year ending June 30, 2021, the company’s return on total capital was markedly negative at -19.02%. This indicates that during that period, the company was unable to generate sufficient earnings to cover its total capital base, reflecting operational challenges, potential overextension, or adverse market conditions that adversely impacted profitability.

By June 30, 2022, the return had improved markedly to -1.34%. Although still negative, this near-zero figure suggests that Carpenter Technology was approaching a break-even point relative to its total capital, indicating a period of transitioning from loss to profitability or improved operational efficiency.

The most notable change occurs by June 30, 2023, when the return turns positive at 9.07%. This shift signifies that the company began efficiently leveraging its total capital to generate profit, marking a significant improvement in operational performance and capital management.

The upward trajectory continues into subsequent years, with the return reaching 16.12% on June 30, 2024, and further increasing to 27.33% by June 30, 2025. These figures suggest that Carpenter Technology not only achieved profitability but also enhanced its ability to generate substantial returns on its total capital base. This growth in return indicates improved operational leverage, strategic implemented efficiencies, and potentially successful market positioning or product offerings.

In summary, from a negative return on total capital in 2021, Carpenter Technology Corporation has experienced a consistent and substantial improvement over the following years, culminating in a robust return of over 27% in 2025. This trend reflects a significant strengthening of the company's financial and operational performance, indicating effective management and a potentially favorable outlook for the company's ability to generate value from its invested capital.