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.