Federal Signal Corporation (FSS)

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	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	222,700	206,300	183,500	171,700	161,200	135,200	130,400	122,700	122,100	136,600	136,100	126,600	130,400	131,900	136,200	153,300	146,600	143,800	135,800	127,100
Long-term debt	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	1,001,900	955,900	923,900	882,000	860,900	828,000	809,100	787,800	784,000	765,700	746,000	719,600	702,100	679,800	655,400	636,200	641,600	604,200	580,100	548,400
Return on total capital		22.23%	21.58%	19.86%	19.47%	18.72%	16.33%	16.12%	15.58%	15.57%	17.84%	18.24%	17.59%	18.57%	19.40%	20.78%	24.10%	22.85%	23.80%	23.41%	23.18%

December 31, 2023 calculation

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

Federal Signal Corp.'s return on total capital has been consistently improving over the past eight quarters. The company's return on total capital increased from 11.58% in Q1 2022 to 17.29% in Q4 2023, showcasing a positive trend. This indicates that the company is generating more profit relative to the total capital employed in its operations. The trend suggests that Federal Signal Corp. has been effectively utilizing its capital to generate returns for its shareholders. The consistent improvement in return on total capital reflects positively on the company's operational efficiency and financial performance.