Trane Technologies plc (TT)
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 | 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 | 1,892,300 | 1,865,100 | 1,824,400 | 1,838,300 |
| Long-term debt | US$ in thousands | 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 | 4,922,900 | 4,921,900 | 4,920,600 | 5,226,500 |
| Total stockholders’ equity | US$ in thousands | 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 | 7,267,600 | 7,237,600 | 7,130,500 | 6,885,800 |
| Return on total capital | 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% | 15.52% | 15.34% | 15.14% | 15.18% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $2,756,900K ÷ ($3,977,900K + $6,995,200K)
= 25.12%
Trane Technologies plc has demonstrated a consistent improvement in its return on total capital over the past eight quarters. The return on total capital has steadily increased from 18.99% in Q1 2022 to 24.58% in Q4 2023, indicating the company's ability to generate more earnings relative to the total capital invested in the business. This upward trend suggests that Trane Technologies is effectively utilizing its capital resources to generate profits and create value for its stakeholders. The company's expanding return on total capital implies efficient capital allocation and strong operational performance, positioning Trane Technologies favorably in terms of financial health and future growth prospects.