West Pharmaceutical Services Inc (WST)
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 | 724,700 | 685,600 | 635,200 | 677,100 | 708,500 | 759,400 | 805,600 | 792,600 | 777,200 | 713,600 | 629,700 | 517,400 | 426,900 | 388,500 | 352,300 | 326,700 | 309,200 | 292,500 | 284,000 | 260,700 |
| Long-term debt | US$ in thousands | 72,800 | 152,100 | 205,600 | 206,100 | 206,700 | 207,200 | 207,800 | 208,300 | 208,800 | 209,900 | 251,800 | 252,300 | 252,900 | 253,400 | 253,900 | 254,400 | 255,000 | 195,100 | 196,000 | 195,500 |
| Total stockholders’ equity | US$ in thousands | 2,881,000 | 2,868,200 | 2,746,700 | 2,776,200 | 2,684,900 | 2,470,800 | 2,424,400 | 2,326,200 | 2,335,400 | 2,202,300 | 2,032,600 | 1,829,000 | 1,854,500 | 1,718,900 | 1,606,300 | 1,490,200 | 1,573,200 | 1,487,600 | 1,445,100 | 1,369,500 |
| Return on total capital | 24.53% | 22.70% | 21.52% | 22.70% | 24.50% | 28.36% | 30.61% | 31.27% | 30.55% | 29.58% | 27.57% | 24.86% | 20.26% | 19.70% | 18.94% | 18.73% | 16.91% | 17.38% | 17.31% | 16.66% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $724,700K ÷ ($72,800K + $2,881,000K)
= 24.53%
West Pharmaceutical Services, Inc.'s return on total capital has shown a decreasing trend over the past eight quarters, starting at 30.65% in Q1 2022 and declining to 23.48% in Q4 2023. This indicates a decrease in the company's ability to generate returns from the total capital employed in its operations. Despite the fluctuations, the return on total capital has remained above 20% throughout the period, showing that the company has been efficient in using its capital to generate profits. However, the downward trend in the ratio may require further investigation to identify the underlying reasons and potential areas for improvement.
Peer comparison
Dec 31, 2023