Now Inc (DNOW)
Return on total capital
| Dec 31, 2024 | Sep 30, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 121,000 | 124,000 | 133,000 | 136,000 | 140,000 | 138,000 | 145,000 | 148,000 | 136,000 | 116,000 | 82,000 | 43,000 | 16,000 | -33,000 | -64,000 | -93,000 | -102,000 | -72,000 | -37,000 | 9,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,128,000 | 1,114,000 | 1,095,000 | 1,076,000 | 1,060,000 | 904,000 | 874,000 | 841,000 | 842,000 | 804,000 | 777,000 | 746,000 | 712,000 | 699,000 | 696,000 | 692,000 | 699,000 | 731,000 | 747,000 | 768,000 |
| Return on total capital | 10.73% | 11.13% | 12.15% | 12.64% | 13.21% | 15.27% | 16.59% | 17.60% | 16.15% | 14.43% | 10.55% | 5.76% | 2.25% | -4.72% | -9.20% | -13.44% | -14.59% | -9.85% | -4.95% | 1.17% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $121,000K ÷ ($—K + $1,128,000K)
= 10.73%
Now Inc's return on total capital has shown fluctuating trends over the years. The company experienced negative returns for several quarters from June 2020 to December 2021, indicating challenges in generating profits in proportion to the capital invested. However, starting from March 2022, there has been a notable improvement in the return on total capital, with a consistent upward trajectory.
From 2022 to 2024, Now Inc's return on total capital increased steadily, reaching a peak of 17.60% in March 2023. This indicates the company's ability to efficiently utilize its total capital to generate returns for its investors and stakeholders. Despite a slight decrease in returns in the subsequent quarters, the overall trend reflects a positive performance in terms of capital efficiency.
Overall, the recent improvement in return on total capital for Now Inc suggests better capital management and operational efficiency, which may have resulted from strategic decisions or improved performance in its core business activities. It will be important for the company to sustain this positive trend to ensure long-term financial stability and profitability.
Peer comparison
Dec 31, 2024