SPS Commerce Inc (SPSC)

Return on total capital

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	77,247	73,376	72,467	71,402	71,182	67,541	61,372	58,933	55,085	53,269	53,702	51,284	50,158	47,365	44,344	42,563	38,406	35,851	33,175	29,810
Long-term debt	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	667,475	626,844	600,981	565,889	537,073	507,663	497,020	491,521	484,259	470,528	454,749	440,523	420,721	394,940	373,310	355,188	354,876	345,068	338,333	330,704
Return on total capital		11.57%	11.71%	12.06%	12.62%	13.25%	13.30%	12.35%	11.99%	11.38%	11.32%	11.81%	11.64%	11.92%	11.99%	11.88%	11.98%	10.82%	10.39%	9.81%	9.01%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $77,247K ÷ ($—K + $667,475K)
= 11.57%

The return on total capital for SPS Commerce Inc. has been relatively stable over the past eight quarters, ranging from 11.57% to 13.30%. The ratio shows the company's ability to generate profits from both its debt and equity capital.

The trend indicates a slight decline in return on total capital from Q4 2022 to Q1 2023, followed by a gradual increase in the subsequent quarters. This could be a sign of efficient allocation of capital and improved profitability in the most recent quarters.

Overall, SPS Commerce Inc. has demonstrated a consistent ability to generate returns for its investors, although there may be fluctuations influenced by various factors such as operational efficiency, financial leverage, and market conditions.