Woodward Inc (WWD)
Return on total capital
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 323,666 | 234,443 | 280,081 | 317,692 | 364,613 |
| Long-term debt | US$ in thousands | 645,709 | 709,760 | 734,122 | 736,849 | 864,899 |
| Total stockholders’ equity | US$ in thousands | 2,070,990 | 1,901,120 | 2,214,780 | 1,992,680 | 1,726,740 |
| Return on total capital | 11.91% | 8.98% | 9.50% | 11.64% | 14.07% |
September 30, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $323,666K ÷ ($645,709K + $2,070,990K)
= 11.91%
To analyze Woodward Inc's return on total capital, we can observe the trend over the past five years. The return on total capital measures the efficiency of the company in generating profits from the total capital employed, which includes both equity and debt.
Woodward Inc's return on total capital has shown variability over the past five years, indicating fluctuations in the company's ability to generate profits in relation to its total capital. In 2023, the return on total capital stood at 11.20%, reflecting an improvement from the preceding year's 8.24%. This increase suggests that Woodward Inc has become more effective in utilizing its total capital to generate profits.
Comparing the return on total capital with previous years, we observe a decline from 2019 when the return on total capital was notably higher at 12.45%. The subsequent years, 2020 and 2021, also displayed lower returns at 10.77% and 8.76% respectively.
The variations in return on total capital highlight potential shifts in the company's operational efficiency and capital utilization. It is important for stakeholders to further investigate the factors contributing to these fluctuations and assess the impact on the company's overall financial performance and strategic direction.
Overall, the analysis of Woodward Inc's return on total capital indicates a fluctuating trend over the past five years, emphasizing the need for deeper examination of the company's capital allocation and operational performance.