Timken Company (TKR)
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 | 627,300 | 683,100 | 667,400 | 634,100 | 615,900 | 567,700 | 558,000 | 540,200 | 523,000 | 514,400 | 522,800 | 482,100 | 456,000 | 485,300 | 471,500 | 508,100 | 531,900 | 512,100 | 503,300 | 489,800 |
| Long-term debt | US$ in thousands | 1,790,300 | 1,601,600 | 2,046,500 | 1,978,800 | 1,914,200 | 1,411,300 | 1,734,300 | 1,747,200 | 1,411,100 | 1,417,000 | 1,424,300 | 1,423,700 | 1,433,900 | 1,533,000 | 1,730,100 | 1,785,800 | 1,648,100 | 1,553,500 | 1,642,600 | 1,746,500 |
| Total stockholders’ equity | US$ in thousands | 2,582,400 | 2,477,800 | 2,531,300 | 2,348,000 | 2,268,300 | 2,093,600 | 2,203,600 | 2,271,100 | 2,294,900 | 2,296,900 | 2,290,900 | 2,175,500 | 2,152,900 | 2,028,100 | 1,883,600 | 1,817,400 | 1,868,200 | 1,744,800 | 1,711,300 | 1,638,500 |
| Return on total capital | 14.35% | 16.75% | 14.58% | 14.66% | 14.73% | 16.20% | 14.17% | 13.44% | 14.11% | 13.85% | 14.07% | 13.39% | 12.71% | 13.63% | 13.05% | 14.10% | 15.13% | 15.53% | 15.01% | 14.47% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $627,300K ÷ ($1,790,300K + $2,582,400K)
= 14.35%
The return on total capital for Timken Co. has shown a slight fluctuation in the recent quarters, ranging between 13.32% to 15.87%. In Q4 2023, it decreased to 14.11% from the previous quarter, which was at 15.71%. This indicates a decline in the efficiency of the company in generating returns from its total capital investments. However, overall, the company has been able to maintain a relatively stable return on total capital above 13% throughout the quarters, with the highest return recorded in Q1 2023 at 15.87%. It is essential for the company to closely monitor and analyze the factors contributing to these fluctuations to ensure sustainable performance and optimal utilization of its capital resources.
Peer comparison
Dec 31, 2023