Novanta Inc (NOVT)
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 | 110,496 | 115,663 | 114,015 | 105,108 | 103,079 | 97,923 | 84,537 | 77,238 | 64,054 | 59,437 | 56,028 | 53,737 | 55,888 | 51,800 | 52,735 | 54,139 | 55,282 | 57,975 | 66,169 | 68,179 |
| Long-term debt | US$ in thousands | 349,404 | 347,879 | 403,586 | 418,535 | 430,662 | 438,447 | 402,679 | 412,521 | 429,361 | 441,831 | 186,866 | 186,145 | 194,927 | 188,089 | 211,946 | 206,752 | 215,334 | 227,507 | 214,562 | 198,203 |
| Total stockholders’ equity | US$ in thousands | 673,460 | 644,856 | 626,030 | 598,017 | 577,586 | 542,202 | 532,169 | 534,693 | 521,291 | 500,113 | 493,064 | 476,123 | 476,809 | 451,249 | 431,898 | 413,103 | 417,172 | 402,877 | 386,182 | 379,701 |
| Return on total capital | 10.80% | 11.65% | 11.07% | 10.34% | 10.22% | 9.99% | 9.04% | 8.15% | 6.74% | 6.31% | 8.24% | 8.11% | 8.32% | 8.10% | 8.19% | 8.73% | 8.74% | 9.20% | 11.01% | 11.80% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $110,496K ÷ ($349,404K + $673,460K)
= 10.80%
Novanta Inc's return on total capital has shown a consistent improving trend over the past eight quarters. The ratio has gradually increased from 9.38% in Q1 2022 to 11.94% in Q4 2023. This indicates that the company is effectively utilizing its capital to generate returns for its investors and stakeholders.
The steady improvement in the return on total capital suggests that Novanta Inc is efficiently deploying its resources to generate profits. This could be attributed to effective capital allocation, operational efficiency, and possibly strategic investments.
Overall, the upward trend in Novanta Inc's return on total capital reflects positively on the company's financial performance and management's ability to generate returns on the capital employed in the business.
Peer comparison
Dec 31, 2023