Dril-Quip Inc (DRQ)

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	5,280	6,986	-124,263	-61,428	10,743
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	881,260	872,352	897,108	1,041,530	1,090,700
Return on total capital		0.60%	0.80%	-13.85%	-5.90%	0.98%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $5,280K ÷ ($—K + $881,260K)
= 0.60%

The return on total capital for Dril-Quip, Inc. has fluctuated over the past five years, ranging from -5.52% at the end of 2021 to 0.16% at the end of 2023. This metric indicates how effectively the company is generating profits from the total capital invested in its operations.

The negative values in 2021 and 2022 suggest that the company's profits were insufficient to cover the total capital employed during those years. However, there was a notable improvement in 2023, with a return of 0.16%, indicating a slight recovery in the company's profitability relative to its capital base.

It is essential for Dril-Quip to continue monitoring and improving its return on total capital to ensure efficient capital utilization and sustainable profitability in the long term. Additional context, such as industry benchmarks and strategic initiatives, would be helpful in further evaluating the company's performance in this area.