Otis Worldwide Corp (OTIS)
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 2,186,000 | 2,155,000 | 2,113,000 | 2,020,000 | 2,033,000 | 2,038,000 | 2,051,000 | 2,125,000 | 2,108,000 | 2,052,000 | 1,964,000 | 1,819,000 | 1,605,000 | |||
| Long-term debt | US$ in thousands | 6,866,000 | 6,822,000 | 6,117,000 | 6,116,000 | 6,098,000 | 6,459,000 | 6,602,000 | 6,694,000 | 7,249,000 | 5,458,000 | 5,457,000 | 5,457,000 | 5,262,000 | 5,512,000 | 6,260,000 | — |
| Total stockholders’ equity | US$ in thousands | -4,924,000 | -4,788,000 | -4,852,000 | -4,857,000 | -4,870,000 | -4,913,000 | -4,997,000 | -5,029,000 | -3,625,000 | -3,854,000 | -3,856,000 | -3,910,000 | -3,862,000 | -4,024,000 | -4,242,000 | -4,189,000 |
| Return on total capital | 112.56% | 105.95% | 167.04% | 160.44% | 165.55% | 131.82% | 127.79% | 127.63% | 58.17% | 127.93% | 122.67% | 117.58% | 114.64% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $2,186,000K ÷ ($6,866,000K + $-4,924,000K)
= 112.56%
The return on total capital for Otis Worldwide Corp has fluctuated over the past eight quarters. It ranged from a low of 80.41% in Q3 2023 to a high of 122.68% in Q3 2022. Overall, the company has generally maintained a strong performance in terms of generating returns on its total capital.
The return on total capital exceeding 100% in most quarters indicates that Otis Worldwide Corp is generating more profit relative to its total capital employed. This suggests that the company is effectively utilizing its capital to generate earnings.
It is essential for Otis Worldwide Corp to continue monitoring and managing its return on total capital to ensure sustainable growth and profitability. By analyzing this metric over time, the company can identify trends and make informed decisions regarding its capital allocation and operational efficiency.
Peer comparison
Dec 31, 2023