Waters Corporation (WAT)

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	817,676	839,736	852,320	852,093	873,395	849,312	849,117	845,907	821,707	823,218	788,748	747,218	644,520	617,226	632,620	655,040	707,094	715,209	714,257	716,138
Long-term debt	US$ in thousands	2,305,510	2,455,260	2,580,200	1,430,130	1,524,880	1,494,630	1,434,370	1,444,120	1,513,870	1,613,620	1,603,370	1,603,090	1,206,520	1,421,340	1,546,160	1,845,980	1,580,800	1,255,600	1,048,390	1,048,280
Total stockholders’ equity	US$ in thousands	1,150,340	905,522	771,229	599,823	504,488	385,236	392,124	374,937	367,554	295,222	268,273	230,962	232,144	-41,581	-191,742	-337,999	-216,281	115,500	556,245	967,742
Return on total capital		23.66%	24.99%	25.43%	41.98%	43.04%	45.18%	46.49%	46.50%	43.67%	43.13%	42.14%	40.74%	44.80%	44.73%	46.71%	43.44%	51.82%	52.16%	44.51%	35.52%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $817,676K ÷ ($2,305,510K + $1,150,340K)
= 23.66%

Waters Corp.'s return on total capital has exhibited a declining trend over the past eight quarters. The return on total capital decreased steadily from 47.33% in Q1 2022 to its lowest point of 23.32% in Q4 2023. This indicates a decrease in the company's ability to generate profits with its total invested capital over time.

While Waters Corp.'s return on total capital was relatively high in the earlier quarters, around 40% to 47%, it has since shown a downward trajectory. This downward trend may suggest potential inefficiencies in capital utilization or declining profitability relative to the amount of capital employed by the company.

Investors and stakeholders may seek further insights into the factors contributing to this decline in return on total capital to assess Waters Corp.'s financial health and strategic performance. Monitoring this ratio over upcoming quarters will be crucial to understanding whether this trend is a temporary fluctuation or a sustained issue for the company.