RPC Inc (RES)
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 | 256,584 | 290,246 | 18,377 | -309,058 | -112,767 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,022,510 | 857,735 | 641,791 | 631,567 | 830,333 |
| Return on total capital | 25.09% | 33.84% | 2.86% | -48.94% | -13.58% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $256,584K ÷ ($—K + $1,022,510K)
= 25.09%
Return on total capital is a significant financial metric that measures a company's ability to generate profit from its total capital employed, including both equity and debt. Looking at RPC, Inc.'s return on total capital over the past five years, we can observe fluctuations in performance.
In 2023, RPC, Inc. achieved a return on total capital of 24.80%, indicating that the company generated $0.248 in profit for every dollar of capital invested. This represents a decline compared to the previous year's return of 32.88%. Despite the decrease, the company's performance remains strong and reflects efficient capital utilization.
The return on total capital in 2021 was 0.82%, which was a significant improvement from the negative returns in 2020 (-16.10%) and 2019 (-4.30%). This demonstrates a turnaround in the company's profitability and efficiency in capital allocation.
Overall, the trend in RPC, Inc.'s return on total capital shows variability over the years, with a notable rebound in 2021 following a period of negative returns. It is essential for the company to sustain or improve its return on total capital in the future to ensure continued financial stability and growth.
Peer comparison
Dec 31, 2023