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.