National Fuel Gas Company (NFG)

Return on total capital

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	773,285	813,007	624,686	12,044	496,267
Long-term debt	US$ in thousands	2,384,480	2,083,410	2,628,690	2,629,580	2,133,720
Total stockholders’ equity	US$ in thousands	-55,060	-625,733	1,786,210	1,971,990	2,139,020
Return on total capital		33.20%	55.77%	14.15%	0.26%	11.61%

September 30, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $773,285K ÷ ($2,384,480K + $-55,060K)
= 33.20%

The return on total capital (ROTC) measures a company's ability to generate profit from the capital invested in the business. National Fuel Gas Co.'s ROTC has displayed some fluctuations over the past five years. In 2023, the ROTC stood at 13.40%, down from 16.80% in 2022. This indicates a decrease in the company's profitability relative to the total capital employed compared to the previous year. However, the 2023 figure is still higher than the ROTC reported in 2020 and 2019, suggesting an improvement over the longer term.

The 2023 ROTC of 13.40% indicates that for every dollar of total capital invested in the company, National Fuel Gas Co. generated a return of approximately $0.134 in profit. While the precise reasons for the fluctuation in ROTC would require further analysis, it may reflect changes in the company's operational efficiency, capital structure, or the overall economic environment.

Overall, the trend in National Fuel Gas Co.'s ROTC indicates variability in its ability to generate returns on the capital employed, with a notable decline in 2023 compared to the prior year. Further investigation into the factors influencing this performance would be necessary to provide a more comprehensive assessment.