Booking Holdings Inc (BKNG)
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 | 5,835,000 | 5,102,000 | 2,496,000 | -631,000 | 5,345,000 |
| Long-term debt | US$ in thousands | 12,223,000 | 11,985,000 | 8,937,000 | 11,029,000 | 7,640,000 |
| Total stockholders’ equity | US$ in thousands | -2,744,000 | 2,782,000 | 6,178,000 | 4,893,000 | 5,933,000 |
| Return on total capital | 61.56% | 34.55% | 16.51% | -3.96% | 39.38% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $5,835,000K ÷ ($12,223,000K + $-2,744,000K)
= 61.56%
Booking Holdings Inc's return on total capital has fluctuated significantly over the past five years. The return on total capital was notably high at 51.05% as of December 31, 2023, indicating that the company generated $0.51 in earnings for every dollar of total capital employed. This represents a substantial improvement compared to the previous year's figure of 32.12%.
Looking back, the return on total capital steadily increased from 2019 to 2020 but then experienced a sharp decline. The figure for 2020 was 3.43%, suggesting a significant drop in the company's profitability. However, the return rebounded in the following years, reaching 14.67% in 2021 and 36.71% in 2019.
Overall, the upward trend in the return on total capital since 2020 indicates an improvement in Booking Holdings Inc's ability to efficiently utilize its total capital to generate profits. This could be attributed to effective cost management, revenue growth, or other strategic initiatives implemented by the company during this period.
Peer comparison
Dec 31, 2023