Arrow Electronics Inc (ARW)
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 | 768,557 | 1,471,160 | 2,068,490 | 1,556,820 | 894,511 |
| Long-term debt | US$ in thousands | 2,773,780 | 2,153,550 | 3,182,960 | 2,244,440 | 2,097,940 |
| Total stockholders’ equity | US$ in thousands | 5,761,150 | 5,805,460 | 5,546,360 | 5,282,300 | 5,089,320 |
| Return on total capital | 9.00% | 18.48% | 23.70% | 20.68% | 12.45% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $768,557K ÷ ($2,773,780K + $5,761,150K)
= 9.00%
Based on the data provided, the return on total capital for Arrow Electronics Inc has fluctuated over the years. The return on total capital was 12.45% as of December 31, 2020, showing a moderate level of profitability.
Subsequently, the return on total capital significantly improved to 20.68% as of December 31, 2021, indicating a strong performance in generating profits relative to the total capital employed. The upward trend in profitability continued in 2022, with the return on total capital reaching 23.70%, demonstrating a further increase in the efficiency of capital utilization.
However, the return on total capital decreased to 18.48% as of December 31, 2023, although it still remained at a relatively healthy level. Finally, the return on total capital experienced a notable decline to 9.00% as of December 31, 2024, signaling a decrease in the company's ability to generate profits from the total capital invested.
Overall, Arrow Electronics Inc has shown varying levels of profitability in utilizing its total capital over the years, with notable improvements followed by a decline in the latter part of the period. It is essential for the company to monitor and assess the factors influencing this ratio to sustain and enhance its financial performance in the future.
Peer comparison
Dec 31, 2024