ESAB Corp (ESAB)
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 | ||
|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 404,166 | 379,027 | 358,875 | 336,114 | 329,065 | |||
| Long-term debt | US$ in thousands | 1,018,060 | 1,089,330 | 1,159,100 | 1,216,870 | 1,218,640 | 1,132,420 | 1,182,190 | — |
| Total stockholders’ equity | US$ in thousands | 1,607,400 | 1,500,810 | 1,506,310 | 1,419,580 | 1,350,210 | 1,209,180 | 1,241,860 | 2,476,850 |
| Return on total capital | 15.39% | 14.63% | 13.46% | 12.75% | 12.81% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $404,166K ÷ ($1,018,060K + $1,607,400K)
= 15.39%
ESAB Corp's return on total capital has shown a consistent upward trend over the past five quarters, increasing from 13.71% in Q4 2022 to 16.31% in Q4 2023. This indicates the company's ability to generate a higher return relative to its total capital employed. The steady improvement in this ratio suggests that ESAB Corp is effectively utilizing its capital to generate profits and create value for its stakeholders. Overall, the increasing trend in return on total capital reflects positively on ESAB Corp's financial performance and efficiency in deploying its resources.
Peer comparison
Dec 31, 2023