Insteel Industries Inc (IIIN)
Return on total capital
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 25,376 | 41,842 | 161,818 | 86,199 | 24,276 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 350,855 | 381,505 | 389,744 | 302,038 | 264,803 |
| Return on total capital | 7.23% | 10.97% | 41.52% | 28.54% | 9.17% |
September 30, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $25,376K ÷ ($—K + $350,855K)
= 7.23%
Return on total capital is a key financial ratio that evaluates a company's ability to generate profit from both its debt and equity capital. In the case of Insteel Industries Inc, the return on total capital has exhibited fluctuations over the past five years.
In 2024, Insteel Industries Inc achieved a return on total capital of 7.23%, indicating a decrease from the previous year's figure of 10.97%. This decline suggests that the company's profitability relative to its total capital employed decreased during the most recent period.
Compared to the significantly high return on total capital of 41.52% in 2022, the current ratio reflects a notable decline in profitability performance. The spike in 2022 could have been an anomaly or driven by specific circumstances that led to exceptionally high profits relative to capital employed that year.
Overall, Insteel Industries Inc's return on total capital has shown variability over the past five years, ranging from as low as 7.23% to as high as 41.52%. It is important for stakeholders to closely monitor the company's performance and investigate the factors contributing to these fluctuations in profitability.
Peer comparison
Sep 30, 2024