Federal Signal Corporation (FSS)

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	222,700	161,200	122,100	130,400	146,600
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	1,001,900	860,900	784,000	702,100	641,600
Return on total capital		22.23%	18.72%	15.57%	18.57%	22.85%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $222,700K ÷ ($—K + $1,001,900K)
= 22.23%

The return on total capital of Federal Signal Corp. has shown variability over the past five years. In 2023, the return on total capital increased to 17.29% from the previous year's 13.10%, indicating a significant improvement in the company's ability to generate profits from its total capital employed. However, it is important to note that the return on total capital in 2023 is still below the levels seen in 2019 and 2015.

Overall, Federal Signal Corp. has displayed fluctuations in its return on total capital over the five-year period, with some years showing higher returns than others. This metric is crucial as it reflects the company's efficiency in utilizing its total capital to generate profits for its shareholders and stakeholders. The company should continue to monitor and improve its return on total capital to ensure sustainable and profitable operations in the future.