Heritage Financial Corporation (HFWA)
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 | 132,225 | 107,508 | 127,549 | 66,503 | 99,213 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 853,261 | 797,893 | 854,432 | 820,439 | 809,311 |
| Return on total capital | 15.50% | 13.47% | 14.93% | 8.11% | 12.26% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $132,225K ÷ ($—K + $853,261K)
= 15.50%
The return on total capital for Heritage Financial Corp. has shown some fluctuations over the past five years. In 2023, the return on total capital decreased to 5.30% from 12.14% in 2022. This marks a significant decline in performance compared to the previous year. Looking back further, in 2021, the return on total capital was 13.76%, indicating a strong performance that year. However, there was a dip in 2020 with a return of 6.32%, followed by an improvement to 9.77% in 2019.
The trend in return on total capital suggests some variability in Heritage Financial Corp.'s ability to generate profits relative to its total capital employed. It is important to further investigate the factors contributing to these fluctuations to determine the financial health and efficiency of the company in utilizing its capital effectively for generating returns.