TRI Pointe Homes Inc (TPH)

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 461,824 554,282 651,106 751,229 766,840 685,317 662,287 631,824 605,040 563,495 492,926 418,151 366,506 368,761 351,953 310,266 271,087 254,685 253,596 303,018
Long-term debt US$ in thousands — — — — — — — — — — — — — — — — — — — —
Total stockholders’ equity US$ in thousands 3,010,960 2,923,400 2,896,110 2,863,620 2,832,390 2,625,730 2,487,570 2,408,230 2,447,620 2,354,140 2,279,290 2,239,760 2,232,540 2,198,090 2,175,800 2,115,280 2,186,530 2,111,680 2,086,630 2,057,020
Return on total capital 15.34% 18.96% 22.48% 26.23% 27.07% 26.10% 26.62% 26.24% 24.72% 23.94% 21.63% 18.67% 16.42% 16.78% 16.18% 14.67% 12.40% 12.06% 12.15% 14.73%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $461,824K ÷ ($—K + $3,010,960K)
= 15.34%

Tri Pointe Homes Inc.'s return on total capital has exhibited a downward trend over the recent quarters, starting at 18.31% in Q4 2022 and decreasing consistently to 9.74% in Q4 2023. This decline may indicate inefficiencies in the company's capital utilization or a decrease in profitability relative to the total capital employed. Despite the fluctuations, the return on total capital has generally been above 15% in the past eight quarters, reflecting a generally efficient utilization of the company's capital to generate profits. Further analysis combining this ratio with other performance indicators would be beneficial to gain a more holistic view of the company's financial health.