Regal Beloit Corporation (RRX)
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 | 426,300 | 695,000 | 364,700 | 283,800 | 353,100 |
| Long-term debt | US$ in thousands | 6,377,000 | 1,989,700 | 1,913,600 | 840,400 | 1,136,900 |
| Total stockholders’ equity | US$ in thousands | 6,344,300 | 6,388,200 | 6,370,000 | 2,544,400 | 2,351,100 |
| Return on total capital | 3.35% | 8.30% | 4.40% | 8.38% | 10.12% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $426,300K ÷ ($6,377,000K + $6,344,300K)
= 3.35%
Regal Rexnord Corp's return on total capital has exhibited fluctuations over the past five years. The return on total capital decreased from 9.07% in 2019 to 4.16% in 2023, indicating a downward trend in profitability and efficiency in utilizing both debt and equity capital to generate returns. However, the return on total capital increased in 2022 to 8.22% before dropping again in 2023.
These fluctuations in return on total capital suggest potential challenges in effectively managing the company's capital structure and operational performance. It is important for Regal Rexnord Corp to assess its capital allocation strategies, operational efficiency, and overall business performance to improve its return on total capital in the future.
Peer comparison
Dec 31, 2023