Healthcare Services Group Inc (HCSG)
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 | 59,379 | 60,868 | 47,540 | 63,208 | 130,560 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 499,927 | 456,616 | 426,172 | 452,677 | 480,461 |
| Return on total capital | 11.88% | 13.33% | 11.16% | 13.96% | 27.17% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $59,379K ÷ ($—K + $499,927K)
= 11.88%
The return on total capital for Healthcare Services Group Inc has exhibited a downward trend over the period from December 31, 2020, to December 31, 2024. Starting at a robust 27.17% in 2020, the return on total capital declined to 13.96% by the end of 2021. This trend continued as the return dropped further to 11.16% in 2022. However, there was a slight improvement in 2023 with a return of 13.33%, followed by a moderate decrease to 11.88% by the end of 2024.
The declining return on total capital may suggest challenges in generating profits relative to the total capital employed by the company. It is important for Healthcare Services Group Inc to closely evaluate the factors influencing this trend and consider strategies to enhance the efficiency of capital utilization and profitability in the future.