Sterling Construction Company Inc (STRL)
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 | 383,533 | 219,935 | 159,367 | 109,818 | 93,690 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 808,081 | 618,913 | 474,599 | 358,767 | 267,270 |
| Return on total capital | 47.46% | 35.54% | 33.58% | 30.61% | 35.05% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $383,533K ÷ ($—K + $808,081K)
= 47.46%
Sterling Construction Company Inc's return on total capital has demonstrated variability over the period from December 31, 2020, to December 31, 2024. At the end of 2020, the return was 35.05%, indicating a relatively strong profitability relative to the company's total capital base. This figure declined to 30.61% by the end of 2021, suggesting a moderation in the company's efficiency in utilizing its capital during that year.
Subsequently, the return on total capital increased again to 33.58% at the end of 2022, reflecting an improvement in operational performance or capital utilization. The trend continued to strengthen in 2023, reaching 35.54%, which is slightly above the 2020 level, indicating a return to or slight improvement over earlier performance metrics.
The most notable change is observed in 2024, where the return on total capital surged to 47.46%. This significant increase suggests a substantial enhancement in the company's profitability relative to its overall capital base, potentially driven by improved operational efficiencies, higher margins, or strategic financial management.
Overall, the data portrays a company that experienced fluctuations in its return on total capital over the four-year span but showed a strong upward trend culminating in a markedly higher return in 2024. This upward trajectory indicates improved performance and efficient utilization of capital resources in the later years.
Peer comparison
Dec 31, 2024