GATX Corporation (GATX)
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 | 685,200 | 581,300 | 424,700 | 400,300 | 378,900 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 2,438,900 | 2,273,000 | 2,029,600 | 2,019,200 | 1,957,400 |
| Return on total capital | 28.09% | 25.57% | 20.93% | 19.82% | 19.36% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $685,200K ÷ ($—K + $2,438,900K)
= 28.09%
Return on total capital is a key financial ratio that reflects a company's efficiency in generating profits from its invested capital. Looking at the data provided for GATX Corporation, we observe a consistent improvement in the return on total capital over the years, indicating the company's ability to utilize its total capital more effectively.
In December 31, 2020, the return on total capital stood at 19.36%, which slightly increased to 19.82% by December 31, 2021. The company's performance improved significantly in the subsequent years, with the return on total capital reaching 20.93% by December 31, 2022, 25.57% by December 31, 2023, and 28.09% by December 31, 2024.
This positive trend showcases GATX Corporation's enhanced profitability and efficient capital utilization, suggesting that the company is generating higher returns relative to the total capital invested. The increasing trend in return on total capital reflects well on the management's strategic decisions and operational effectiveness, indicating a strong performance trajectory for the company in the analyzed period.
Peer comparison
Dec 31, 2024