Asbury Automotive Group Inc (ABG)

Return on total capital

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 953,400 1,131,500 1,180,400 1,228,200 1,272,500 1,206,000 1,093,400 976,300 791,800 690,200 608,300 472,100 370,800 315,400 278,500 282,200 325,000 323,200 321,800 315,500
Long-term debt US$ in thousands — 2,912,100 3,001,200 3,038,000 2,960,900 2,865,800 3,025,500 3,291,000 3,502,000 1,394,300 1,404,400 1,215,500 1,253,900 1,243,800 989,200 854,200 983,700 922,100 927,400 922,400
Total stockholders’ equity US$ in thousands 3,244,100 3,248,500 3,068,600 3,049,200 2,903,500 2,642,900 2,410,400 2,182,500 2,115,500 1,301,300 1,148,300 998,000 905,500 811,900 713,100 660,900 646,300 600,000 556,300 504,600
Return on total capital 29.39% 18.37% 19.45% 20.18% 21.70% 21.89% 20.11% 17.84% 14.10% 25.60% 23.83% 21.33% 17.17% 15.34% 16.36% 18.63% 19.94% 21.23% 21.69% 22.11%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $953,400K ÷ ($—K + $3,244,100K)
= 29.39%

Asbury Automotive Group Inc's return on total capital has exhibited fluctuations over the past eight quarters. The return on total capital ranged from a low of 12.63% in Q4 2023 to a high of 20.02% in Q3 2022. Overall, the company's return on total capital has generally been positive, indicating its ability to generate profits relative to the total capital invested in the business during the respective periods.

The decreasing trend from 20.02% in Q3 2022 to 12.63% in Q4 2023 suggests a potential decline in the company's efficiency in utilizing its total capital to generate returns. In contrast, the increase from 16.22% in Q1 2022 to 19.21% in Q1 2023 shows a positive development in the company's return on total capital during the first quarters of respective years.

It is essential for Asbury Automotive Group Inc to assess the factors contributing to the fluctuations in its return on total capital, such as changes in revenue, expenses, and capital structure. By identifying the underlying drivers of these variations, the company can implement strategies to enhance its efficiency in deploying capital and improve its overall financial performance.