Advance Auto Parts Inc (AAP)
Return on total capital
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Oct 7, 2023 | Sep 30, 2023 | Jul 15, 2023 | Jun 30, 2023 | Apr 22, 2023 | Mar 31, 2023 | Dec 31, 2022 | Oct 8, 2022 | Sep 30, 2022 | Jun 30, 2022 | Apr 23, 2022 | Mar 31, 2022 | Dec 31, 2021 | Oct 9, 2021 | Sep 30, 2021 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -638,242 | 119,723 | 73,231 | -52,443 | -4,032 | 180,586 | 329,929 | 464,166 | 474,346 | 509,315 | 563,125 | 657,490 | 717,438 | 749,687 | 699,901 | 745,409 | 773,147 | 814,805 | 951,205 | 974,136 |
| Long-term debt | US$ in thousands | — | — | — | — | — | 1,518,770 | — | 1,706,400 | — | 1,784,180 | — | — | 998,000 | — | — | — | — | — | 1,103,630 | — |
| Total stockholders’ equity | US$ in thousands | 2,169,940 | 2,597,680 | 2,606,750 | 2,564,650 | 2,519,730 | 2,566,340 | 2,646,870 | 2,642,650 | 2,723,190 | 2,562,720 | 2,636,160 | 2,599,190 | 2,719,550 | 2,716,080 | 2,794,810 | 2,909,680 | 2,909,680 | 3,128,290 | 3,196,540 | 3,196,540 |
| Return on total capital | -29.41% | 4.61% | 2.81% | -2.04% | -0.16% | 4.42% | 12.46% | 10.67% | 17.42% | 11.72% | 21.36% | 25.30% | 19.30% | 27.60% | 25.04% | 25.62% | 26.57% | 26.05% | 22.12% | 30.47% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-638,242K ÷ ($—K + $2,169,940K)
= -29.41%
Advance Auto Parts Inc's return on total capital has shown fluctuations over the period from September 30, 2021, to December 31, 2024. The ratio started at a high of 30.47% in September 2021, indicating efficient utilization of both debt and equity to generate profits. However, there was a decrease to 22.12% by October 2021 before rebounding to 26.05% by December 2021.
The trend continued with some fluctuations in the following quarters, ranging between 25.62% and 27.60% until September 2022. There was a notable decline to 19.30% by October 2022 and further decreases in subsequent periods. By December 2023, the return on total capital had turned negative, indicating that the capital employed was not generating sufficient returns.
The ratio improved slightly in the following periods but remained low, with values around 2.81% to -29.41% until December 2024. This downward trend suggests challenges in efficiently deploying capital to generate profits, potentially impacting the company's overall financial performance and value creation for shareholders.
Peer comparison
Dec 31, 2024