NewMarket Corporation (NEU)

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	526,321	533,222	478,217	435,944	382,936	303,934	285,734	268,969	281,769	324,214	377,800	336,146	357,615	348,673	319,034	389,193	360,831	366,979	348,655	319,353
Long-term debt	US$ in thousands	643,622	779,401	916,179	957,958	1,003,740	1,008,520	911,295	841,074	789,853	991,919	990,551	990,189	598,848	608,702	690,292	740,511	642,941	675,398	706,085	788,357
Total stockholders’ equity	US$ in thousands	1,077,060	971,943	892,740	821,800	762,407	667,376	721,335	760,090	762,129	772,773	849,210	810,355	759,824	723,526	635,285	639,249	683,098	629,338	589,176	538,196
Return on total capital		30.59%	30.45%	26.44%	24.49%	21.68%	18.14%	17.50%	16.80%	18.16%	18.37%	20.54%	18.67%	26.32%	26.17%	24.07%	28.21%	27.21%	28.13%	26.92%	24.07%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $526,321K ÷ ($643,622K + $1,077,060K)
= 30.59%

NewMarket Corp.'s return on total capital has shown a consistent upward trend over the past eight quarters, indicating improved efficiency in generating returns from the total capital employed in its operations. The company's return on total capital increased from 15.77% in Q1 2022 to 27.75% in Q4 2023, demonstrating a steady growth trajectory.

The significantly higher return on total capital in the latest quarter of 27.75% compared to the previous quarters suggests that NewMarket Corp. has been able to effectively utilize its capital to generate profits. This could be attributed to improved operational efficiency, better asset management, or effective capital allocation strategies.

Overall, the increasing trend in return on total capital signifies that NewMarket Corp. is effectively maximizing the returns generated from its total capital base, which is a positive indicator of the company's financial performance and management effectiveness.