Topbuild Corp (BLD)
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 | 900,097 | 798,851 | 462,586 | 355,546 | 291,601 |
| Long-term debt | US$ in thousands | 1,373,030 | 1,417,260 | 1,454,480 | 683,396 | 697,955 |
| Total stockholders’ equity | US$ in thousands | 2,563,660 | 1,929,710 | 1,636,430 | 1,348,790 | 1,152,890 |
| Return on total capital | 22.86% | 23.87% | 14.97% | 17.50% | 15.76% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $900,097K ÷ ($1,373,030K + $2,563,660K)
= 22.86%
TopBuild Corp's return on total capital has fluctuated over the past five years. In 2023, the company achieved a return on total capital of 22.03%, a slight decrease from the previous year's figure of 23.47%. Despite the slight decline, the company's return on total capital remains relatively strong compared to previous years, indicating efficient utilization of both debt and equity to generate profits.
Looking back at the trend from 2019 to 2023, there is an overall positive trajectory in the return on total capital, with fluctuations observed year over year. This indicates that TopBuild Corp has been successful in managing its capital effectively to generate returns for its investors. The company's ability to consistently generate decent returns on its total capital reflects positively on its operational efficiency and financial performance. However, it is essential for TopBuild Corp to continue monitoring and managing its capital structure to sustain and potentially improve this metric in the future.