Zurn Elkay Water Solutions Corporation (ZWS)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Mar 31, 2020 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 193,800 | 115,400 | 158,300 | 241,100 | 157,600 |
| Long-term debt | US$ in thousands | 494,400 | 530,200 | 533,900 | 1,397,000 | 1,236,800 |
| Total stockholders’ equity | US$ in thousands | 1,602,800 | 1,615,000 | 126,400 | 1,311,000 | 1,228,600 |
| Return on total capital | 9.24% | 5.38% | 23.97% | 8.90% | 6.39% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $193,800K ÷ ($494,400K + $1,602,800K)
= 9.24%
The return on total capital for Zurn Elkay Water Solutions Corporation has varied over the past five years. In 2021, the company achieved a significant return on total capital of 23.97%, indicating efficient utilization of both equity and debt in generating profits. This high return may have been driven by strong operational performance or effective capital allocation strategies.
In subsequent years, the return on total capital decreased to 5.38% in 2022 and then increased to 9.24% in 2023. The decrease in 2022 suggests potential challenges or inefficiencies in capital deployment, leading to lower profitability. However, the improvement in 2023 indicates a positive trend towards better utilization of capital resources.
Overall, the varying returns on total capital suggest that Zurn Elkay Water Solutions Corporation has experienced fluctuations in its efficiency in generating profits relative to the total capital employed. It is important for the company to consistently monitor and enhance its capital allocation strategies to ensure optimal returns for its shareholders and stakeholders.
Peer comparison
Dec 31, 2023