Carpenter Technology Corporation (CRS)

Return on total capital

		Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	264,500	218,800	234,300	186,800	126,600	82,800	47,200	1,600	-18,200	-106,800	-158,000	-220,800	-256,600	-331,000	-227,900	-84,400	25,900	238,400	258,700	255,100
Long-term debt	US$ in thousands	694,200	693,900	693,600	693,300	693,000	692,700	692,400	692,100	691,800	690,900	695,000	694,800	694,500	694,300	694,000	693,800	551,800	552,400	550,600	550,900
Total stockholders’ equity	US$ in thousands	1,628,800	1,502,600	1,473,800	1,429,300	1,396,100	1,327,200	1,321,100	1,306,800	1,330,500	1,347,100	1,333,100	1,367,600	1,392,300	1,381,200	1,332,900	1,407,500	1,445,700	1,618,500	1,603,400	1,577,000
Return on total capital		11.39%	9.96%	10.81%	8.80%	6.06%	4.10%	2.34%	0.08%	-0.90%	-5.24%	-7.79%	-10.71%	-12.30%	-15.95%	-11.24%	-4.02%	1.30%	10.98%	12.01%	11.99%

June 30, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $264,500K ÷ ($694,200K + $1,628,800K)
= 11.39%

Carpenter Technology Corporation's return on total capital has shown fluctuations over the past few quarters. From September 2019 to June 2020, the return on total capital ranged from 10.98% to 12.01%, indicating a relatively stable performance during this period. However, starting from September 2020, there was a decline in the return on total capital, reaching negative values by March 2021.

Subsequently, there was a gradual improvement in the return on total capital, with positive percentages recorded from June 2021 to June 2024. The return on total capital increased from -15.95% in March 2021 to 11.39% in June 2024, indicating a positive trend in the company's ability to generate returns for both debt and equity providers.

Overall, the trend suggests that Carpenter Technology Corporation has successfully improved its utilization of capital and has been able to generate better returns for its investors over the recent quarters. However, it is important for the company to sustain this positive trend in return on total capital to ensure long-term financial stability and growth.