Chart Industries Inc (GTLS)
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 | 647,000 | 347,100 | 130,600 | 93,100 | 107,200 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 2,828,800 | 2,786,500 | 2,684,300 | 1,625,200 | 1,591,300 |
| Return on total capital | 22.87% | 12.46% | 4.87% | 5.73% | 6.74% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $647,000K ÷ ($—K + $2,828,800K)
= 22.87%
Return on total capital is a key financial metric that indicates how efficiently a company is generating profits from its capital investments. In the case of Chart Industries Inc, the return on total capital was 6.74% as of December 31, 2020, which decreased to 5.73% by December 31, 2021, and further declined to 4.87% by December 31, 2022.
However, there was a significant improvement in the company's performance in the subsequent years, with the return on total capital increasing to 12.46% by December 31, 2023, and further rising to 22.87% by December 31, 2024. This upward trend in the return on total capital indicates that Chart Industries Inc has been able to effectively utilize its capital to generate higher returns for its investors.
Overall, the fluctuation in the return on total capital over the years suggests that Chart Industries Inc has experienced varying levels of efficiency in utilizing its capital resources. The recent significant improvement in this metric highlights the company's ability to enhance profitability and create value for its stakeholders.