Federal Signal Corporation (FSS)

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	276,400	222,700	160,900	121,200	135,300
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	1,186,100	1,001,900	860,900	784,000	702,100
Return on total capital		23.30%	22.23%	18.69%	15.46%	19.27%

December 31, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $276,400K ÷ ($—K + $1,186,100K)
= 23.30%

Federal Signal Corporation's return on total capital has exhibited some fluctuations over the past five years. The company's return on total capital decreased from 19.27% in December 2020 to 15.46% in December 2021, which indicates a temporary decline in the company's efficiency in generating profits from its total invested capital.

However, Federal Signal Corporation's return on total capital showed a positive trend in the following years, increasing to 18.69% in December 2022, 22.23% in December 2023, and reaching 23.30% in December 2024. These improvements suggest that the company has managed to enhance its operational efficiency and profitability in utilizing its total capital investments effectively.

Overall, the upward trend in Federal Signal Corporation's return on total capital over the past five years reflects the company's ability to generate higher returns relative to the total capital employed in its operations. This positive trajectory indicates that the company has been effective in optimizing its capital allocation and enhancing its overall financial performance.