Deluxe Corporation (DLX)
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 | 199,822 | 168,669 | 213,902 | 219,806 | 48,975 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 620,918 | 604,094 | 604,200 | 574,600 | 540,800 |
| Return on total capital | 32.18% | 27.92% | 35.40% | 38.25% | 9.06% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $199,822K ÷ ($—K + $620,918K)
= 32.18%
Deluxe Corporation's return on total capital has shown significant fluctuations over the five-year period from 2020 to 2024. The ratio increased from 9.06% in 2020 to 38.25% in 2021, indicating a substantial improvement in utilizing its capital to generate returns. However, there was a slight decrease in 2022 to 35.40%, followed by a further decline to 27.92% in 2023. In 2024, the return on total capital rebounded to 32.18%, showing a moderate recovery.
Overall, Deluxe Corporation's return on total capital demonstrates variability in its efficiency in generating profits relative to the total capital employed. The company experienced both periods of strong performance and slight setbacks, highlighting the importance of closely monitoring and optimizing capital utilization to sustain profitability.