Willscot Mobile Mini Holdings Corp A (WSC)
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 | 284,090 | 685,009 | 506,952 | 255,780 | 133,650 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,018,590 | 1,261,250 | 1,565,300 | 1,996,760 | 2,141,280 |
| Return on total capital | 27.89% | 54.31% | 32.39% | 12.81% | 6.24% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $284,090K ÷ ($—K + $1,018,590K)
= 27.89%
The analysis of Willscot Mobile Mini Holdings Corp A's return on total capital (ROTC) over the specified period reveals significant fluctuations and overall growth trends. As of December 31, 2020, the company's ROTC was reported at 6.24%, indicating a relatively modest utilization of its total capital to generate earnings. By the end of 2021, this metric increased substantially to 12.81%, signifying improved efficiency in capital utilization and possibly reflecting operational improvements or favorable market conditions.
The most notable change occurred by December 31, 2022, with the ROTC rising sharply to 32.39%. This substantial increase suggests a dramatic enhancement in the company's ability to generate returns from its total capital, potentially driven by higher profitability, efficient asset deployment, or strategic initiatives that improved operating margins. The upward trajectory continued into 2023, with the ROTC reaching 54.31%, further emphasizing the company's improved performance and effective management of its capital base.
However, in 2024, a decline to 27.89% was observed, indicating a decrease in the company's efficiency in generating returns on its total capital. This reduction could be attributed to various factors such as increased capital investments not yet translating into proportionate earnings, shifts in market conditions, or operational challenges.
Overall, the data depict a company that experienced rapid growth in its return on total capital over the three-year span from 2020 to 2023, culminating in a peak at the end of 2023. The subsequent decline in 2024 suggests a need for further analysis to understand the causes behind the reduction and to assess whether it represents a temporary setback or a broader change in the company's strategic or operational environment.