Airbnb Inc (ABNB)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 2,553,000 | 1,518,000 | 1,802,000 | 429,000 |
| Long-term debt | US$ in thousands | 1,995,000 | 1,991,000 | 1,987,000 | 1,983,000 |
| Total stockholders’ equity | US$ in thousands | 8,412,000 | 8,165,000 | 5,560,000 | 4,775,000 |
| Return on total capital | 24.53% | 14.95% | 23.88% | 6.35% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $2,553,000K ÷ ($1,995,000K + $8,412,000K)
= 24.53%
Based on the provided data, Airbnb Inc's return on total capital has shown significant fluctuations over the years. In December 31, 2021, the return on total capital was 6.35%, indicating a relatively lower efficiency in generating profits relative to its total capital employed. However, by December 31, 2022, the return on total capital surged to 23.88%, reflecting a substantial improvement in the company's profitability and capital utilization efficiency.
In the following year, by December 31, 2023, the return on total capital decreased to 14.95%, but still remained at a moderate level, signifying a slight dip in the company's ability to generate profits from its total capital base. Finally, by December 31, 2024, the return on total capital increased to 24.53%, surpassing the previous highs and demonstrating a strong rebound in profitability and capital efficiency.
Overall, the fluctuating trends in Airbnb Inc's return on total capital showcase the company's ability to adapt and optimize its capital utilization strategies, leading to improvements in profitability over the years. It is essential for investors and stakeholders to closely monitor these changes to assess the company's financial performance and future prospects.
Peer comparison
Dec 31, 2024