Itron Inc (ITRI)
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 | 134,340 | -9,204 | -98,129 | -13,716 | 122,076 |
| Long-term debt | US$ in thousands | 454,827 | 452,526 | 450,228 | 902,577 | 932,482 |
| Total stockholders’ equity | US$ in thousands | 1,310,910 | 1,168,470 | 1,116,080 | 816,548 | 776,538 |
| Return on total capital | 7.61% | -0.57% | -6.26% | -0.80% | 7.14% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $134,340K ÷ ($454,827K + $1,310,910K)
= 7.61%
Itron Inc.'s return on total capital has shown fluctuations over the past five years. In 2023, the return on total capital improved significantly to 9.83%, indicating that the company generated a higher return relative to its total capital invested. This improvement may suggest more efficient operations or better utilization of capital during the year.
In contrast, the return on total capital was considerably lower in 2022 at 1.29%, reflecting a decrease in the company's ability to generate returns on its total capital compared to the previous year. The sharp decline in this ratio in 2022 could indicate challenges or inefficiencies in the company's capital allocation or operational performance.
Similarly, in 2021, the return on total capital was 2.53%, showing a slight increase from the previous year but still below historical levels. This may imply ongoing challenges in maximizing returns on the total capital base.
The return on total capital for 2020 was 4.97%, indicating a moderate improvement from 2019 but still lower than the recent peak seen in 2019 when the ratio stood at 8.13%. This suggests that the company was more effective in utilizing its total capital in 2019 compared to the subsequent years.
Overall, while Itron Inc.'s return on total capital has shown variations over the past five years, the significant increase in 2023 is a positive signal of improved capital efficiency and profitability. Monitoring this ratio over time can provide insights into the company's ability to generate returns from its total capital base.
Peer comparison
Dec 31, 2023