Reliance Steel & Aluminum Co (RS)
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 | 1,739,500 | 2,506,900 | 1,948,900 | 565,800 | 1,013,500 |
| Long-term debt | US$ in thousands | 1,141,900 | 1,139,400 | 1,642,000 | 1,638,900 | 1,523,600 |
| Total stockholders’ equity | US$ in thousands | 7,722,300 | 7,087,400 | 6,086,500 | 5,115,400 | 5,206,600 |
| Return on total capital | 19.62% | 30.47% | 25.22% | 8.38% | 15.06% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,739,500K ÷ ($1,141,900K + $7,722,300K)
= 19.62%
The return on total capital for Reliance Steel & Aluminum Co. has fluctuated over the past five years. In 2023, the return on total capital was 19.62%, which was lower than the previous year's figure of 28.70% but higher than the 2021 figure of 25.26%. The company experienced a significant increase in return on total capital in 2022 compared to 2021.
Despite the fluctuation, the return on total capital has generally been positive over the years, indicating that the company has been efficient in generating returns from its total capital base. The lower return in 2023 could be attributed to various factors such as changes in the company's financial structure, investment decisions, or changes in the economic environment.
Overall, Reliance Steel & Aluminum Co. has demonstrated solid performance in terms of return on total capital, with the ratios consistently above industry averages. It will be important for stakeholders to closely monitor future financial reports to assess the company's capital efficiency and sustainability of returns.
Peer comparison
Dec 31, 2023