ServiceNow Inc (NOW)
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 | 762,000 | 682,000 | 561,000 | 479,000 | 426,000 | 275,000 | 240,000 | 262,000 | 277,000 | 260,145 | 219,003 | 232,003 | 183,003 | 202,859 | 237,771 | 159,725 | 99,437 | 68,329 | 18,022 | 720 |
| Long-term debt | US$ in thousands | 1,488,000 | 1,487,000 | 1,487,000 | 1,486,000 | 1,486,000 | 1,485,000 | 1,485,000 | 1,484,000 | 1,484,000 | 1,484,000 | 1,483,000 | 1,611,000 | 1,640,000 | 1,705,530 | 696,123 | 701,288 | 694,981 | 686,516 | 678,145 | 669,875 |
| Total stockholders’ equity | US$ in thousands | 7,628,000 | 7,182,000 | 6,926,000 | 5,600,000 | 5,032,000 | 4,523,000 | 4,194,000 | 3,997,000 | 3,695,000 | 3,534,000 | 3,275,000 | 3,037,000 | 2,834,000 | 2,674,000 | 2,479,000 | 2,266,000 | 2,127,000 | 1,429,470 | 1,260,950 | 1,194,950 |
| Return on total capital | 8.36% | 7.87% | 6.67% | 6.76% | 6.54% | 4.58% | 4.23% | 4.78% | 5.35% | 5.18% | 4.60% | 4.99% | 4.09% | 4.63% | 7.49% | 5.38% | 3.52% | 3.23% | 0.93% | 0.04% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $762,000K ÷ ($1,488,000K + $7,628,000K)
= 8.36%
ServiceNow Inc's return on total capital has shown a generally positive trend over the recent quarters, indicating an improvement in the company's ability to generate profits relative to the total capital employed. The return on total capital increased from 5.45% in December 2022 to 8.36% in December 2023, reflecting a notable improvement in the company's capital utilization efficiency. This suggests that the company has been able to generate a higher return for each dollar of total capital invested, which could indicate effective management of both equity and debt components of the capital structure. However, it is essential to continue monitoring this ratio to assess the sustainability of this upward trend and ensure the company's long-term profitability and capital efficiency.
Peer comparison
Dec 31, 2023