Kodiak Gas Services, Inc. (KGS)

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 273,052 257,650 309,471 229,683 168,431
Long-term debt US$ in thousands — — — — —
Total stockholders’ equity US$ in thousands 1,359,910 1,142,650 229,093 960,071 755,286
Return on total capital 20.08% 22.55% 135.09% 23.92% 22.30%

December 31, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $273,052K ÷ ($—K + $1,359,910K)
= 20.08%

The return on total capital for Kodiak Gas Services, Inc. demonstrates significant fluctuations over the analyzed period from December 31, 2020, to December 31, 2024. At the end of 2020, the company's return on total capital was 22.30%, indicating a relatively modest efficiency in generating income from its capital base. This figure increased slightly in 2021 to 23.92%, reflecting a marginal improvement in capital utilization or profitability.

However, a dramatic spike occurred by the end of 2022, with the return surging to 135.09%. Such an elevated figure suggests an extraordinary event or exceptional performance during that year, potentially attributable to factors such as substantial income gains, significant one-time items, or improvements in operational efficiency that markedly enhanced profitability relative to the total capital employed.

Following this peak, the return on total capital receded sharply in 2023 to 22.55%, aligning more closely with the earlier years, yet still remaining relatively high compared to 2020 and 2021 levels. This decline indicates a normalization of the company's performance after the exceptional results of 2022. The figure further decreased in 2024 to 20.08%, suggesting a slight erosion in the company's efficiency or profitability relative to its total capital base, possibly due to market, operational, or strategic factors.

Overall, the data illustrates a period of substantial fluctuation, with a notable anomalous peak in 2022 that may warrant further investigation into the underlying causes. The subsequent decline towards more sustainable levels suggests stabilization, albeit at a higher baseline than the pre-2022 years.