Otter Tail Corporation (OTTR)

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	401,166	393,551	250,592	150,504	134,880
Long-term debt	US$ in thousands	824,059	823,821	734,014	624,432	689,581
Total stockholders’ equity	US$ in thousands	1,443,010	1,217,320	990,777	870,966	781,482
Return on total capital		17.70%	19.28%	14.53%	10.06%	9.17%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $401,166K ÷ ($824,059K + $1,443,010K)
= 17.70%

The return on total capital for Otter Tail Corporation has exhibited fluctuations over the past five years. In 2023, the return on total capital was 16.09%, a decrease from the previous year's figure of 19.05%. Despite this decline, the return on total capital in 2023 remained relatively strong compared to earlier years, such as in 2020 and 2019 when the returns were 8.62% and 9.13%, respectively.

The trend in Otter Tail Corporation's return on total capital demonstrates variability in the company's efficiency in generating profits from its total capital deployed. The company's ability to maintain a return on total capital above 10% in recent years indicates a reasonably successful utilization of its capital resources to generate returns for shareholders. However, the slight decrease in 2023 compared to 2022 suggests a potential need for further analysis to identify factors impacting the company's return on total capital and to assess strategies for improvement.