Waters Corporation (WAT)
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 | 844,545 | 817,676 | 873,395 | 821,707 | 645,489 |
| Long-term debt | US$ in thousands | 1,626,490 | 2,305,510 | 1,524,880 | 1,513,870 | 1,206,520 |
| Total stockholders’ equity | US$ in thousands | 1,828,510 | 1,150,340 | 504,488 | 367,554 | 232,144 |
| Return on total capital | 24.44% | 23.66% | 43.04% | 43.67% | 44.87% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $844,545K ÷ ($1,626,490K + $1,828,510K)
= 24.44%
Based on the provided data, Waters Corporation's return on total capital has shown a slight decrease over the past five years. The return on total capital was at its highest at 44.87% on December 31, 2020, and has gradually declined to 24.44% by December 31, 2024.
The trend indicates that the company's ability to generate profits relative to the total capital employed has decreased over time. A decline in return on total capital could be due to various factors such as increased expenses, lower revenue growth, or inefficiencies in capital utilization.
It is essential for Waters Corporation to closely monitor its return on total capital and identify the reasons behind the decline in order to make necessary strategic adjustments to improve overall financial performance and efficiency in capital utilization.
Peer comparison
Dec 31, 2024