Chart Industries Inc (GTLS)
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 | 390,700 | 151,500 | 88,500 | 92,200 | 74,500 |
| Long-term debt | US$ in thousands | 3,576,400 | 2,039,800 | 600,800 | 221,600 | 761,000 |
| Total stockholders’ equity | US$ in thousands | 2,786,500 | 2,675,500 | 1,616,600 | 1,572,700 | 1,227,600 |
| Return on total capital | 6.14% | 3.21% | 3.99% | 5.14% | 3.75% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $390,700K ÷ ($3,576,400K + $2,786,500K)
= 6.14%
Return on total capital (ROTC) is a key measure of a company's profitability and efficiency in generating returns from its total capital employed. It indicates how well the company is utilizing its total capital to generate profits.
Chart Industries Inc's ROTC has shown some fluctuations over the past five years, ranging from 3.04% in 2019 to 5.94% in 2023. The upward trend in ROTC from 2021 to 2023 is a positive sign, suggesting improved profitability and efficiency in utilizing capital during these years.
The 2023 ROTC of 5.94% indicates that for every dollar of total capital employed, the company generated a return of approximately 5.94 cents. This suggests that Chart Industries Inc has been able to effectively utilize its capital to generate profits for its shareholders.
Overall, the trend of increasing ROTC in recent years is encouraging, but it is important for the company to sustain this improvement and continue to enhance its profitability and efficiency in utilizing its total capital in the future.