SPS Commerce Inc (SPSC)

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	77,248	71,182	55,085	50,158	38,406
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	667,475	537,073	484,259	420,721	354,876
Return on total capital		11.57%	13.25%	11.38%	11.92%	10.82%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $77,248K ÷ ($—K + $667,475K)
= 11.57%

The return on total capital for SPS Commerce Inc. has shown some fluctuation over the past five years. The company achieved a return on total capital of 11.57% in 2023, slightly lower than the 13.25% recorded in 2022. This indicates a decrease in the company's ability to generate profits from its total capital invested in the business.

Comparing the recent performance with earlier years, the return on total capital in 2023 is higher than the 11.38% in 2021 and 10.82% in 2019, suggesting an improvement in profitability efficiency.

However, the return on total capital in 2023 is lower than the 11.92% achieved in 2020, indicating a slight decline in the company's profitability performance.

Overall, the return on total capital for SPS Commerce Inc. has shown variability over the years, with some improvements in recent performance but a slight decline compared to the previous year. It is important for the company to continue monitoring and enhancing its efficiency in generating returns from its total capital to ensure sustainable profitability.