Return on total capital %

Return on total capital (ROTC) is a financial metric that measures the efficiency of a company in generating operating income relative to the total capital employed in the business. It indicates how well a company is utilizing its capital to generate profits. This metric considers the total capital base over two fiscal periods (t1 and t2), providing a more stable and accurate reflection of the company's performance.

ROTC = ( Operating income / Average total capital ) * 100

If the denominator is negative, the formula will return an empty value.

Average total capital = ( Shareholders’ equity (t1) + Shareholders’ equity (t2) + Total debt (t1) + Total debt (t2) + Minority interest (t1) + Minority interest (t2) ) / 2

Two fiscal periods average means the average value between two comparable periods: for years it is the last two years, for half-years it is H1 2024 and H1 2023, for quarters it is Q2 2024 and Q2 2023. For quarterly and semi-annual periodicity values, the TTM value of Operating income (sum of the last 4 quarters) is used in the numerator.

ROTC provides with insights into how effectively a company is utilizing its capital to generate operating income. A higher percentage of ROTC indicates that the company is generating more income relative to the capital invested, which is a positive signal for investors.