Watts Water Technologies Inc (WTS)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 357,700 | 314,600 | 240,400 | 180,300 | 198,000 |
| Long-term debt | US$ in thousands | 298,300 | 147,600 | 141,900 | 198,200 | 204,200 |
| Total stockholders’ equity | US$ in thousands | 1,513,300 | 1,300,600 | 1,173,200 | 1,069,800 | 978,000 |
| Return on total capital | 19.74% | 21.72% | 18.28% | 14.22% | 16.75% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $357,700K ÷ ($298,300K + $1,513,300K)
= 19.74%
Watts Water Technologies, Inc. has demonstrated a consistent performance in generating returns on its total capital over the past five years. The return on total capital decreased slightly from 22.36% in 2022 to 19.67% in 2023, which may indicate a slight decline in the efficiency of its capital utilization. However, the company’s return on total capital remained relatively stable and high compared to previous years, indicating effective utilization of both debt and equity to generate profits. This suggests that Watts Water Technologies has been successful in managing its capital resources efficiently to create value for its stakeholders.
Peer comparison
Dec 31, 2023