nVent Electric PLC (NVT)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 535,200 | 587,400 | 503,800 | 376,200 | 268,300 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 3,237,600 | 3,142,100 | 2,731,700 | 2,496,100 | 2,409,800 |
| Return on total capital | 16.53% | 18.69% | 18.44% | 15.07% | 11.13% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $535,200K ÷ ($—K + $3,237,600K)
= 16.53%
nVent Electric PLC's return on total capital has shown a positive trend over the years, increasing from 11.13% in December 31, 2020, to 16.53% in December 31, 2024. This indicates that the company is generating increasing returns on the total capital employed in its operations.
The significant improvement in the return on total capital from 2020 to 2024 reflects the company's ability to efficiently utilize its capital resources to generate profits. This suggests that nVent Electric PLC is effectively managing its assets and liabilities to maximize returns for its stakeholders.
Overall, the consistent improvement in the return on total capital demonstrates the company's financial strength and operational efficiency. Investors and stakeholders may view this positively as it indicates that nVent Electric PLC is making effective use of its capital to drive profitability and create value.
Peer comparison
Dec 31, 2024