California Water Service Group (CWT)

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	77,135	127,660	126,770	136,666	99,412
Long-term debt	US$ in thousands	1,052,770	1,052,490	1,055,790	781,100	786,754
Total stockholders’ equity	US$ in thousands	1,426,730	1,317,590	1,177,590	921,344	779,906
Return on total capital		3.11%	5.39%	5.68%	8.03%	6.35%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $77,135K ÷ ($1,052,770K + $1,426,730K)
= 3.11%

The return on total capital for California Water Service Group has shown a declining trend over the past five years, from 6.86% in 2019 to 3.60% in 2023. This indicates a decrease in the company's ability to generate profits relative to its total capital employed.

The decreasing trend in return on total capital suggests that the company may be experiencing challenges in efficiently utilizing its capital to generate returns for its investors. This could be a result of various factors such as increasing operating expenses, declining revenue growth, or inefficient capital allocation decisions.

Investors and stakeholders may closely monitor this trend and seek further insights into the company's operational and financial performance to understand the reasons behind the declining return on total capital. It is essential for the company to address the underlying factors affecting its return on total capital to enhance its profitability and long-term financial sustainability.