Novanta Inc (NOVT)
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 | 110,496 | 103,079 | 64,054 | 55,888 | 55,282 |
| Long-term debt | US$ in thousands | 349,404 | 430,662 | 429,361 | 194,927 | 215,334 |
| Total stockholders’ equity | US$ in thousands | 673,460 | 577,586 | 521,291 | 476,809 | 417,172 |
| Return on total capital | 10.80% | 10.22% | 6.74% | 8.32% | 8.74% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $110,496K ÷ ($349,404K + $673,460K)
= 10.80%
Novanta Inc has shown a consistent trend in its return on total capital over the past five years, with values ranging from 8.53% to 11.94%. The return on total capital increased steadily from 2019 to 2023, peaking in 2023 at 11.94%. This indicates that Novanta Inc has been effectively utilizing its total capital to generate profits for its shareholders.
The improvement in return on total capital suggests that the company has been efficient in deploying its capital to generate returns. Furthermore, the consistent increase in this ratio over the years points towards the company's ability to effectively manage its capital investments and generate higher profits relative to its total capital base.
Overall, the trend in Novanta Inc's return on total capital reflects positively on the company's financial performance and efficiency in utilizing its capital resources to create value for its stakeholders.
Peer comparison
Dec 31, 2023