Now Inc (DNOW)
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 | 140,000 | 143,000 | 150,000 | 143,000 | 131,000 | 103,000 | 69,000 | 40,000 | 9,000 | -35,000 | -66,000 | -95,000 | -420,000 | -520,000 | -485,000 | -439,000 | -83,000 | 76,000 | 88,000 | 89,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 62,000 | 124,000 |
| Total stockholders’ equity | US$ in thousands | 1,060,000 | 904,000 | 874,000 | 841,000 | 842,000 | 804,000 | 777,000 | 746,000 | 711,000 | 699,000 | 696,000 | 692,000 | 699,000 | 731,000 | 747,000 | 768,000 | 1,144,000 | 1,267,000 | 1,264,000 | 1,245,000 |
| Return on total capital | 13.21% | 15.82% | 17.16% | 17.00% | 15.56% | 12.81% | 8.88% | 5.36% | 1.27% | -5.01% | -9.48% | -13.73% | -60.09% | -71.14% | -64.93% | -57.16% | -7.26% | 6.00% | 6.64% | 6.50% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $140,000K ÷ ($—K + $1,060,000K)
= 13.21%
NOW Inc's return on total capital has shown a fluctuating trend over the past eight quarters. The return on total capital ranged from 5.76% in Q1 2022 to a peak of 18.19% in Q1 2023. Despite some variations, the return on total capital has generally been on an upward trajectory, with an average improvement of approximately 2% every quarter. This indicates that NOW Inc has been effectively utilizing its capital to generate returns for its shareholders. The recent return on total capital of 13.21% in Q4 2023, while slightly lower than the preceding quarter, is within a reasonable range and suggests that NOW Inc continues to generate solid returns relative to its total capital base.
Peer comparison
Dec 31, 2023