Heritage Financial Corporation (HFWA)
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 | — | 72,915 | 94,377 | 93,468 | 87 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 863,527 | 853,261 | 797,893 | 854,432 | 820,439 |
| Return on total capital | 0.00% | 8.55% | 11.83% | 10.94% | 0.01% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $—K ÷ ($—K + $863,527K)
= 0.00%
The return on total capital for Heritage Financial Corporation shows significant fluctuations over the five-year period provided. Starting at a minimal 0.01% on December 31, 2020, the company experienced a substantial increase to 10.94% by the end of 2021, indicating a positive performance. This positive trend continued into 2022, with a further rise to 11.83%, demonstrating the company's effective utilization of its total capital to generate returns.
However, a slight dip was observed in 2023, with the return on total capital decreasing to 8.55%. Although this decrease may raise some concerns, it is important to note that the return remained relatively robust compared to the initial years. Lastly, a notable decline is evident in 2024, with the return on total capital dropping to 0.00%, signifying a potential issue with the company's capital deployment and profitability during that period.
Overall, Heritage Financial Corporation showcased periods of strong performance in terms of return on total capital, indicating efficient capital management and value creation for shareholders. However, the fluctuations observed highlight the importance of continuous monitoring and strategic decision-making to sustain and enhance the company's financial performance over time.