Trane Technologies plc (TT)
Return on total capital
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 3,434,100 | 3,294,500 | 3,120,100 | 2,918,900 | 2,756,900 | 2,665,500 | 2,532,200 | 2,416,600 | 2,356,000 | 2,226,800 | 2,078,600 | 2,023,600 | 1,990,600 | 1,930,300 | 1,923,000 | 1,659,800 | 1,400,400 | 1,426,900 | 1,477,200 | 1,706,100 |
| Long-term debt | US$ in thousands | 4,318,100 | 4,317,100 | 4,316,200 | 3,978,700 | 3,977,900 | 4,476,300 | 4,476,600 | 4,481,800 | 3,788,300 | 3,787,500 | 3,786,700 | 4,492,600 | 4,491,700 | 4,490,700 | 4,489,800 | 4,496,300 | 4,496,500 | 4,494,200 | 4,618,200 | 4,624,800 |
| Total stockholders’ equity | US$ in thousands | 7,457,400 | 7,591,500 | 6,947,300 | 6,889,700 | 6,995,200 | 6,681,800 | 6,258,800 | 6,036,100 | 6,088,600 | 5,858,300 | 5,723,500 | 5,998,600 | 6,255,900 | 6,475,100 | 6,457,300 | 6,296,700 | 6,407,700 | 6,366,700 | 5,936,900 | 5,772,600 |
| Return on total capital | 29.16% | 27.66% | 27.70% | 26.86% | 25.12% | 23.89% | 23.59% | 22.98% | 23.85% | 23.09% | 21.86% | 19.29% | 18.52% | 17.60% | 17.57% | 15.38% | 12.84% | 13.14% | 14.00% | 16.41% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $3,434,100K ÷ ($4,318,100K + $7,457,400K)
= 29.16%
Trane Technologies plc's return on total capital has shown a generally positive trend over the analyzed period, starting at 16.41% in March 2020 and consistently increasing to 29.16% by December 2024. The company's return on total capital increased steadily with some fluctuations along the way, reflecting improved efficiency in generating profits relative to the total capital employed.
The return on total capital reached its lowest point in December 2023 at 25.12% but rebounded strongly in the following quarters, surpassing previous levels. This indicates the company's ability to effectively utilize its capital to generate returns for its stakeholders.
Overall, the increasing trend in Trane Technologies plc's return on total capital suggests that the company has been successful in deploying its capital efficiently to drive profitability and create value for its shareholders.