Trimble Inc (TRMB)
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 | 448,800 | 510,900 | 561,000 | 419,800 | 375,900 |
| Long-term debt | US$ in thousands | 2,536,200 | 1,220,000 | 1,293,200 | 1,291,400 | 1,624,200 |
| Total stockholders’ equity | US$ in thousands | 4,500,100 | 4,050,200 | 3,944,700 | 3,596,900 | 3,119,000 |
| Return on total capital | 6.38% | 9.69% | 10.71% | 8.59% | 7.93% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $448,800K ÷ ($2,536,200K + $4,500,100K)
= 6.38%
Trimble Inc's return on total capital has exhibited some fluctuations over the past five years. The company's return on total capital decreased from 10.71% in 2021 to 6.38% in 2023, indicating a decline in the efficiency of utilizing its total capital to generate profits. Despite this decrease, Trimble Inc's return on total capital remained above the levels seen in 2020 and 2019, which were 8.59% and 7.93% respectively. This suggests that the company has historically been able to effectively generate returns relative to its total capital investment.
It's important for Trimble Inc to closely monitor changes in its return on total capital to ensure efficient allocation of resources and sustainable profitability in the long term. Factors impacting this ratio could include changes in the company's financial structure, operational efficiency, or overall market conditions. Overall, further analysis and investigation into the drivers of the fluctuations in return on total capital can provide valuable insights for management decision-making.
Peer comparison
Dec 31, 2023