Asbury Automotive Group Inc (ABG)
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 | 844,300 | 959,100 | 1,247,300 | 804,500 | 410,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 3,502,100 | 3,244,100 | 2,903,300 | 2,115,500 | 905,500 |
| Return on total capital | 24.11% | 29.56% | 42.96% | 38.03% | 45.28% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $844,300K ÷ ($—K + $3,502,100K)
= 24.11%
Asbury Automotive Group Inc's return on total capital has exhibited fluctuations over the years based on the provided data. The return on total capital was notably high at 45.28% as of December 31, 2020, indicating efficient utilization of the company's capital to generate profits. Subsequently, the return saw a decline to 38.03% by December 31, 2021, albeit remaining relatively robust.
However, there was a significant improvement in the return on total capital by December 31, 2022, reaching 42.96%, suggesting a potential enhancement in capital efficiency. The trend reversed in the following years, with the return decreasing to 29.56% by December 31, 2023, and further declining to 24.11% by December 31, 2024.
This downward trend in return on total capital may indicate decreasing profitability in relation to the overall capital employed by the company. Asbury Automotive Group Inc should assess its capital allocation strategies and operational efficiency to address this trend and strive for sustainable growth and profitability.
Peer comparison
Dec 31, 2024