Encompass Health Corp (EHC)
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 | 887,000 | 750,700 | 630,200 | 659,400 | 572,200 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 2,067,000 | 1,647,500 | 1,310,300 | 1,911,300 | 1,588,000 |
| Return on total capital | 42.91% | 45.57% | 48.10% | 34.50% | 36.03% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $887,000K ÷ ($—K + $2,067,000K)
= 42.91%
Encompass Health Corp's return on total capital has shown a generally positive trend over the period from December 31, 2020, to December 31, 2024. The ratio decreased from 36.03% in 2020 to 34.50% in 2021, before experiencing a significant increase to 48.10% in 2022. Subsequently, the return on total capital decreased to 45.57% in 2023 and then to 42.91% in 2024.
The overall performance indicates that Encompass Health Corp has been effectively utilizing its total capital to generate returns for its stakeholders. The peak in 2022 suggests a period of strong efficiency and profitability, although there was a slight decline in the following years. It is important for the company to monitor and manage its capital allocation strategies to sustain and potentially improve its return on total capital in the future.
Peer comparison
Dec 31, 2024