RPC Inc (RES)

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	112,078	256,584	290,246	18,377	-309,058
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	1,078,290	1,022,510	857,735	641,791	631,567
Return on total capital		10.39%	25.09%	33.84%	2.86%	-48.94%

December 31, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $112,078K ÷ ($—K + $1,078,290K)
= 10.39%

Return on total capital is a key financial ratio that indicates the efficiency with which a company is utilizing its total capital to generate profits. In the case of RPC Inc, the return on total capital has shown significant variability over the years.

In December 31, 2020, RPC Inc's return on total capital was -48.94%, indicating that the company was not efficiently utilizing its total capital to generate profits and may have incurred losses during that period. However, there has been a notable improvement in the subsequent years.

By December 31, 2021, the return on total capital had increased to 2.86%, signaling a turnaround in the company's capital efficiency. The positive trend continued in the following years, with the return on total capital reaching 33.84% by December 31, 2022, indicating a significant improvement in capital utilization.

Although there was a slight dip in the return on total capital to 25.09% by December 31, 2023, the ratio remained relatively strong, showing that RPC Inc continued to generate favorable returns on its total capital. By December 31, 2024, the return on total capital stood at 10.39%, which, although lower compared to previous years, still reflects a reasonable level of capital efficiency.

Overall, the trend in RPC Inc's return on total capital demonstrates a mix of challenges and improvements, highlighting the company's ability to enhance its profitability through better capital management strategies over the specified period.