CTS Corporation (CTS)
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 | 75,459 | 75,051 | 83,467 | -59,513 | 45,307 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,017,870 | 526,822 | 506,224 | 463,578 | 423,682 |
| Return on total capital | 7.41% | 14.25% | 16.49% | -12.84% | 10.69% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $75,459K ÷ ($—K + $1,017,870K)
= 7.41%
CTS Corporation's return on total capital has varied over the past five years.
In December 31, 2020, the return on total capital was 10.69%, indicating that the company generated a positive return on the capital invested in the business. However, this metric deteriorated significantly by December 31, 2021, with a negative return of -12.84%, suggesting that the company was not effectively utilizing its total capital to generate profits.
The trend reversed in the following years, with the return on total capital improving to 16.49% by December 31, 2022, and further increasing to 14.25% by December 31, 2023. These figures indicate that the company managed to enhance its profitability and efficiency in utilizing its total capital during these periods.
However, by December 31, 2024, the return on total capital dropped to 7.41%, indicating a decline in the company's ability to generate returns relative to the total capital employed.
Overall, CTS Corporation's return on total capital has shown fluctuations over the years, with both positive and negative trends. It is essential for the company to focus on maintaining or improving this ratio to ensure efficient allocation of resources and sustainable profitability in the future.
Peer comparison
Dec 31, 2024