Sturm Ruger & Company Inc (RGR)
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 | 31,654 | 59,029 | 108,535 | 206,758 | 121,172 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 319,582 | 331,721 | 316,738 | 363,661 | 264,699 |
| Return on total capital | 9.90% | 17.79% | 34.27% | 56.85% | 45.78% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $31,654K ÷ ($—K + $319,582K)
= 9.90%
Sturm Ruger & Company Inc's return on total capital has displayed a notable trend over the past five years. Starting at a robust 45.78% on December 31, 2020, the return on total capital increased significantly to 56.85% by December 31, 2021, showcasing the company's ability to generate strong returns relative to the capital employed. However, there was a decline in the return on total capital to 34.27% by December 31, 2022, followed by a further decrease to 17.79% by December 31, 2023. This downward trend continued, with the return on total capital dropping to 9.90% by December 31, 2024.
The analysis of return on total capital indicates that while the company initially experienced high returns on its total capital, there has been a consistent decline in performance over the years. This decreasing trend may raise concerns about the company's efficiency in utilizing its capital resources to generate profits. It is essential for stakeholders to closely monitor this metric to understand the company's ability to generate returns on the total capital invested and to identify potential areas for improvement.
Peer comparison
Dec 31, 2024