SPS Commerce Inc (SPSC)

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 88,883 77,248 71,182 55,085 50,158
Long-term debt US$ in thousands
Total stockholders’ equity US$ in thousands 854,690 667,475 537,073 484,259 420,721
Return on total capital 10.40% 11.57% 13.25% 11.38% 11.92%

December 31, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $88,883K ÷ ($—K + $854,690K)
= 10.40%

SPS Commerce Inc's return on total capital has shown some variation over the past five years. The return on total capital was 11.92% as of December 31, 2020, and decreased slightly to 11.38% by December 31, 2021. However, there was an improvement in the return on total capital to 13.25% as of December 31, 2022. Subsequently, there was a slight decline to 11.57% by December 31, 2023, and a further decrease to 10.40% by December 31, 2024. This indicates that the company's ability to generate profits from its total capital investment has fluctuated in recent years, with a notable increase in 2022 followed by declines in subsequent years. Further analysis may be needed to understand the factors driving these fluctuations and to assess the company's overall financial performance.