California Water Service Group (CWT)

Return on total capital

		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	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	77,135	68,186	89,658	100,998	127,660	111,826	118,032	132,989	126,770	141,351	176,261	146,508	136,666	131,988	77,493	92,013	99,412	105,592	101,354	101,180
Long-term debt	US$ in thousands	1,052,770	1,051,850	1,052,070	1,052,340	1,052,490	1,053,940	1,054,170	1,055,640	1,055,790	1,059,720	1,059,940	780,951	781,100	785,055	785,257	786,467	786,754	807,478	807,693	710,602
Total stockholders’ equity	US$ in thousands	1,426,730	1,410,670	1,389,520	1,298,200	1,317,590	1,273,460	1,202,520	1,164,630	1,177,590	1,115,970	997,118	929,802	921,344	890,192	782,023	755,140	779,906	757,795	723,164	714,129
Return on total capital		3.11%	2.77%	3.67%	4.30%	5.39%	4.80%	5.23%	5.99%	5.68%	6.50%	8.57%	8.56%	8.03%	7.88%	4.94%	5.97%	6.35%	6.75%	6.62%	7.10%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (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 consistent downward trend over the past eight quarters, decreasing from 6.77% in Q1 2022 to 3.60% in Q4 2023. This suggests that the company may be experiencing challenges in generating returns relative to the total capital invested in its operations. The declining trend in return on total capital could be a cause for concern as it indicates a lower efficiency in utilizing both equity and debt capital to generate profits. Further analysis is needed to understand the factors driving this trend and to identify potential areas for improvement in the company's capital allocation and operational efficiency.