Titan International Inc (TWI)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 44,700 | 128,533 | 232,149 | 83,261 | -27,577 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 496,073 | 467,060 | 381,236 | 229,300 | 179,264 |
| Return on total capital | 9.01% | 27.52% | 60.89% | 36.31% | -15.38% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $44,700K ÷ ($—K + $496,073K)
= 9.01%
Titan International Inc's return on total capital has shown significant fluctuations over the past five years. The ratio was negative in 2020, indicating that the company was not generating sufficient returns to cover its total capital.
However, in 2021, the return on total capital improved substantially to 36.31%, signaling a positive turnaround in the company's performance. This upward trend continued in 2022, with the ratio increasing to 60.89%, indicating that Titan International Inc was able to generate strong returns relative to its total capital invested.
In 2023, there was a slight dip in the return on total capital to 27.52%, but the ratio remained relatively healthy, indicating that the company was still profitably utilizing its capital resources.
By 2024, the return on total capital had decreased further to 9.01%, suggesting a decline in the efficiency of capital utilization by the company compared to the previous years.
Overall, Titan International Inc's return on total capital has shown variability, with some years demonstrating strong performance and others showing a decline. It is important for the company to consistently monitor this ratio to ensure efficient use of capital and sustainable profitability in the long run.
Peer comparison
Dec 31, 2024