Shutterstock (SSTK)

Return on total capital

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	68,708	57,685	56,728	44,777	68,400	73,923	85,416	102,075	93,624	100,571	94,055	101,906	108,106	121,105	128,283	117,603	85,266	63,476	37,312	17,837
Long-term debt	US$ in thousands	119,598	120,392	—	—	0	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	518,350	522,915	520,412	541,275	527,094	531,963	519,507	476,534	447,482	430,583	429,093	444,423	468,482	474,896	465,334	440,504	421,925	390,240	343,500	327,727
Return on total capital		10.77%	8.97%	10.90%	8.27%	12.98%	13.90%	16.44%	21.42%	20.92%	23.36%	21.92%	22.93%	23.08%	25.50%	27.57%	26.70%	20.21%	16.27%	10.86%	5.44%

December 31, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $68,708K ÷ ($119,598K + $518,350K)
= 10.77%

Shutterstock's return on total capital has shown fluctuations over the period from March 31, 2020, to December 31, 2024. The ratio increased from 5.44% in March 2020 to a peak of 27.57% in June 2021, indicating an improvement in the company's ability to generate returns from its total capital employed. However, the ratio started declining after reaching its peak, gradually decreasing to 10.77% by December 31, 2024.

The downward trend in the return on total capital from June 2021 to December 2024 suggests that the company may be facing challenges in efficiently utilizing its capital to generate profits. It is essential for management to assess the factors contributing to this decline and implement strategies to enhance the return on total capital in order to maximize shareholder value and ensure long-term financial sustainability.