nVent Electric PLC (NVT)
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 | 578,900 | 503,800 | 353,000 | 26,900 | 302,100 |
| Long-term debt | US$ in thousands | 1,748,800 | 1,068,200 | 994,200 | 928,000 | 1,047,100 |
| Total stockholders’ equity | US$ in thousands | 3,142,100 | 2,731,700 | 2,496,100 | 2,409,800 | 2,592,500 |
| Return on total capital | 11.84% | 13.26% | 10.11% | 0.81% | 8.30% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $578,900K ÷ ($1,748,800K + $3,142,100K)
= 11.84%
nVent Electric plc's return on total capital has shown a positive trend over the past five years, increasing from 9.11% in 2019 to 11.93% in 2023. This indicates that the company has been effectively utilizing its total capital to generate profits for its stakeholders. The consistent improvement in this ratio reflects the company's ability to efficiently deploy its financial resources and generate returns above the cost of capital. Overall, nVent Electric plc's increasing return on total capital demonstrates its strong financial performance and effective capital management strategies.
Peer comparison
Dec 31, 2023