West Pharmaceutical Services Inc (WST)
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 | 588,500 | 706,800 | 767,300 | 772,900 | 422,600 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 2,682,300 | 2,881,000 | 2,684,900 | 2,335,400 | 1,854,500 |
| Return on total capital | 21.94% | 24.53% | 28.58% | 33.09% | 22.79% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $588,500K ÷ ($—K + $2,682,300K)
= 21.94%
West Pharmaceutical Services Inc's return on total capital has shown a fluctuating trend over the years. The return on total capital has increased from 22.79% as of December 31, 2020, to 33.09% as of December 31, 2021, marking a significant improvement in profitability. However, in the following years, the return on total capital slightly decreased to 28.58% as of December 31, 2022, and further to 24.53% as of December 31, 2023. By the end of the period, the return on total capital stood at 21.94% as of December 31, 2024, representing a decline compared to the previous years.
Overall, West Pharmaceutical Services Inc has demonstrated the ability to generate a strong return on total capital, indicating efficient utilization of both debt and equity to generate profits. However, the decrease in the return on total capital in the latter years suggests potential challenges or changes in the company's capital structure or profitability levels that may require further analysis and monitoring.
Peer comparison
Dec 31, 2024