Ingersoll Rand Inc (IR)
Return on total capital
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,175,400 | 1,133,900 | 1,027,700 | 950,500 | 857,500 | 825,500 | 774,700 | 840,200 | 628,400 | 526,700 | 446,600 | 109,100 | 89,100 | -44,200 | -41,800 | 102,200 | 260,400 | 365,100 | 410,800 | 438,800 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 9,783,800 | 9,554,000 | 9,414,800 | 9,317,300 | 9,195,800 | 8,750,900 | 8,776,900 | 8,992,200 | 9,001,500 | 8,653,600 | 9,277,900 | 8,956,700 | 9,119,700 | 8,771,700 | 8,574,900 | 8,686,200 | 1,869,900 | 1,790,500 | 1,785,300 | 1,737,700 |
| Return on total capital | 12.01% | 11.87% | 10.92% | 10.20% | 9.32% | 9.43% | 8.83% | 9.34% | 6.98% | 6.09% | 4.81% | 1.22% | 0.98% | -0.50% | -0.49% | 1.18% | 13.93% | 20.39% | 23.01% | 25.25% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $1,175,400K ÷ ($—K + $9,783,800K)
= 12.01%
Ingersoll-Rand Inc's return on total capital has been showing a positive trend over the past eight quarters, reflecting an improvement in the company's ability to generate profits from its invested capital. The return on total capital increased from 5.21% in Q1 2022 to 9.93% in Q4 2023, indicating a steady growth trajectory.
The consistent upward trend in return on total capital suggests that Ingersoll-Rand Inc has been effectively utilizing its capital to generate returns for shareholders. This improvement may be attributed to better operational efficiency and effective capital allocation strategies implemented by the company's management.
The increasing return on total capital is a positive sign for investors, as it demonstrates the company's ability to generate profits relative to the total capital employed in its operations. It also indicates that Ingersoll-Rand Inc is becoming more efficient in utilizing its resources to create value for its stakeholders.
Peer comparison
Dec 31, 2023