Watts Water Technologies Inc (WTS)
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 | 400,700 | 357,700 | 314,600 | 240,400 | 180,300 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,707,900 | 1,513,300 | 1,300,600 | 1,173,200 | 1,069,800 |
| Return on total capital | 23.46% | 23.64% | 24.19% | 20.49% | 16.85% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $400,700K ÷ ($—K + $1,707,900K)
= 23.46%
Watts Water Technologies Inc's return on total capital has experienced a positive trend over the specified years, increasing progressively from 16.85% as of December 31, 2020, to 23.46% as of December 31, 2024. This indicates that the company has been efficiently utilizing its total capital to generate returns for its shareholders and investors.
Overall, the increasing trend in return on total capital reflects positively on the company's operational efficiency and financial performance. It suggests that Watts Water Technologies Inc has been effectively managing its capital investments and generating higher returns on the capital deployed in its operations. This trend is indicative of the company's ability to generate profits relative to the total capital employed, which is a key metric for assessing the financial health and performance of a company.
The consistent improvement in return on total capital over the years demonstrates the company's commitment to maximizing shareholder value and efficiently utilizing its resources to drive profitability. It also indicates that Watts Water Technologies Inc has been successful in effectively allocating its capital to projects or investments that yield favorable returns, ultimately contributing to the overall financial strength and stability of the company.
Peer comparison
Dec 31, 2024