Arrow Electronics Inc (ARW)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,471,160 | 2,068,490 | 1,556,820 | 894,511 | 107,696 |
| Long-term debt | US$ in thousands | 2,153,550 | 3,182,960 | 2,244,440 | 2,097,940 | 2,640,130 |
| Total stockholders’ equity | US$ in thousands | 5,805,460 | 5,546,360 | 5,282,300 | 5,089,320 | 4,811,920 |
| Return on total capital | 18.48% | 23.70% | 20.68% | 12.45% | 1.45% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,471,160K ÷ ($2,153,550K + $5,805,460K)
= 18.48%
The return on total capital for Arrow Electronics Inc. has exhibited fluctuations over the past five years. In 2023, the return on total capital was 16.24%, showing a decrease from the previous year's figure of 22.43% in 2022. Despite this decline, the return in 2023 remains higher than the levels observed in 2020 and 2019, indicating an improvement in the company's efficiency in generating returns relative to the capital employed.
Looking at the overall trend, Arrow Electronics Inc. has demonstrated a generally increasing return on total capital from 2019 to 2022, indicating improved operational performance and capital utilization efficiency. However, the decrease in 2023 suggests a potential need to evaluate the company's capital allocation strategies to maintain or enhance profitability in the future.
Overall, the return on total capital for Arrow Electronics Inc. shows variability but generally positive performance, highlighting the importance of monitoring and managing capital allocation to sustain and enhance returns for the company and its stakeholders.
Peer comparison
Dec 31, 2023