Powell Industries Inc (POWL)
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 | 87,310 | 62,520 | 43,078 | 22,375 | 12,604 | 7,274 | 824 | -1,312 | -2,735 | 1,296 | 1,953 | 6,214 | 16,949 | 20,558 | 24,068 | 27,039 | 18,842 | 12,564 | 7,974 | 2,769 |
| Long-term debt | US$ in thousands | — | — | — | — | — | 0 | — | — | 0 | 0 | 0 | 0 | 0 | 400 | 400 | 400 | 400 | 800 | 800 | 800 |
| Total stockholders’ equity | US$ in thousands | 366,320 | 345,026 | 324,070 | 305,795 | 298,472 | 297,206 | 295,948 | 292,870 | 295,579 | 301,223 | 302,941 | 306,332 | 307,845 | 306,626 | 303,571 | 300,131 | 301,673 | 299,153 | 295,659 | 292,294 |
| Return on total capital | 23.83% | 18.12% | 13.29% | 7.32% | 4.22% | 2.45% | 0.28% | -0.45% | -0.93% | 0.43% | 0.64% | 2.03% | 5.51% | 6.70% | 7.92% | 9.00% | 6.24% | 4.19% | 2.69% | 0.94% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $87,310K ÷ ($—K + $366,320K)
= 23.83%
To analyze Powell Industries, Inc.'s return on total capital, we should consider the trend over time. The return on total capital measures the efficiency of the company in generating profits from its total capital, which includes both debt and equity.
Looking at the data from the table, we observe a notable improvement in the return on total capital over the past eight quarters. The return on total capital has steadily increased from -0.51% in March 2022 to 23.83% in December 2023. This suggests that the company has been able to generate higher returns relative to its total capital base.
The significant improvement in the return on total capital indicates that Powell Industries, Inc. has been more effective in utilizing its total capital to generate profits. This could be attributed to factors such as improved operational efficiency, better capital allocation, or a reduction in the cost of capital.
Overall, the increasing trend in return on total capital reflects positively on the company's financial performance and indicates that it has been successful in maximizing returns from its total capital base. However, it is important to consider other financial metrics and industry benchmarks to gain a comprehensive understanding of the company's overall financial health.
Peer comparison
Dec 31, 2023