Sensata Technologies Holding NV (ST)

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	143,956	181,676	575,521	593,208	337,398
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	2,890,440	2,996,280	3,110,810	3,094,730	2,705,490
Return on total capital		4.98%	6.06%	18.50%	19.17%	12.47%

December 31, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $143,956K ÷ ($—K + $2,890,440K)
= 4.98%

Sensata Technologies Holding NV's return on total capital has fluctuated over the past five years. In December 2020, the return on total capital was 12.47%, indicating that for every dollar of total capital employed, the company generated a return of 12.47 cents. This ratio increased significantly to 19.17% by December 2021, suggesting improved efficiency in utilizing its capital to generate profits.

However, in the following years, Sensata's return on total capital experienced a decline. By December 2022, it stood at 18.50%, still relatively strong but lower compared to the previous year. The downward trend continued in December 2023, with a sharp decrease to 6.06%, indicating a decline in the company's ability to generate returns on its total capital.

By December 2024, Sensata's return on total capital decreased further to 4.98%, the lowest among the years analyzed. This suggests that the company may be facing challenges in effectively utilizing its total capital to generate profits and may need to assess and improve its capital allocation strategies.

Overall, Sensata Technologies Holding NV's return on total capital has shown fluctuations over the past five years, reflecting varying efficiency in capital utilization. It is essential for the company to closely monitor and address the factors impacting this ratio to ensure sustainable growth and maximization of shareholder value.