Shenandoah Telecommunications Co (SHEN)
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 | 9,624 | -7,958 | 999,737 | -2,601 | 84,974 |
| Long-term debt | US$ in thousands | 292,804 | 74,306 | 0 | 0 | 688,464 |
| Total stockholders’ equity | US$ in thousands | 652,670 | 638,007 | 642,275 | 577,051 | 468,135 |
| Return on total capital | 1.02% | -1.12% | 155.66% | -0.45% | 7.35% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $9,624K ÷ ($292,804K + $652,670K)
= 1.02%
The return on total capital for Shenandoah Telecommunications Co. has varied over the past five years. In 2019, the company achieved a relatively high return on total capital of 8.14%, indicating efficient utilization of its total capital to generate profits. However, in the following years, the return on total capital fluctuated.
In 2020, the return on total capital was negative at -0.09%, suggesting a period of capital inefficiency and potentially financial difficulties. This trend continued in 2022 with a further decline to -0.21%, indicating ongoing challenges in generating returns on the total capital invested in the business.
However, in 2021 and 2023, Shenandoah Telecommunications Co. managed to improve its return on total capital to 0.82% and 1.28% respectively. While these figures show some recovery from the negative returns in the prior years, the company still has room for improvement in maximizing its profitability relative to its total capital. Overall, consistent monitoring and strategic management of the company's capital efficiency will be crucial for sustained financial performance.
Peer comparison
Dec 31, 2023