Parsons Corp (PSN)

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	248,784	159,506	105,405	161,989	74,377
Long-term debt	US$ in thousands	745,963	743,605	591,922	539,998	249,353
Total stockholders’ equity	US$ in thousands	2,287,210	2,043,570	1,900,770	1,813,770	1,629,890
Return on total capital		8.20%	5.72%	4.23%	6.88%	3.96%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $248,784K ÷ ($745,963K + $2,287,210K)
= 8.20%

The return on total capital for Parsons Corp has shown a steady improvement over the past five years, with an upward trend in the percentage. The company's return on total capital was 8.20% as of December 31, 2023, representing an increase from the previous year's 5.72%. This indicates that Parsons Corp is generating a higher return relative to the total capital employed in the business. The company's ability to generate a higher return on total capital suggests improved operational efficiency and effective capital allocation strategies. Overall, the increasing trend in return on total capital reflects positively on Parsons Corp's financial performance and management of capital resources.