Gentherm Inc (THRM)

Return on total capital

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	77,439	48,307	115,006	89,217	84,260
Long-term debt	US$ in thousands	222,217	232,653	36,250	189,934	78,124
Total stockholders’ equity	US$ in thousands	644,722	672,273	653,806	586,331	484,096
Return on total capital		8.93%	5.34%	16.67%	11.49%	14.99%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $77,439K ÷ ($222,217K + $644,722K)
= 8.93%

Gentherm Inc's return on total capital has shown variability over the past five years. The return on total capital was 11.72% at the end of 2023, which indicates that for every dollar of total capital employed in the business, the company generated a return of 11.72 cents. This marks an improvement compared to the prior year, where the return was 6.09%.

In 2021, Gentherm Inc achieved a return on total capital of 17.16%, reflecting a strong performance in efficiently utilizing its total capital to generate profits. This figure was slightly lower than the return on total capital in 2019, which stood at 17.56%. The return on total capital for 2020 was 12.20%, indicating a moderate performance in capital utilization during that period.

Overall, Gentherm Inc's return on total capital has demonstrated some fluctuations in recent years, with 2021 standing out as a particularly strong year in terms of capital efficiency. It is important for the company to continue monitoring and improving its return on total capital to ensure sustainable and profitable operations.