Topbuild Corp (BLD)
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 | 886,343 | 900,097 | 798,851 | 462,586 | 355,546 |
| Long-term debt | US$ in thousands | 1,327,160 | 1,373,030 | 1,417,260 | 1,454,480 | 683,396 |
| Total stockholders’ equity | US$ in thousands | 2,209,620 | 2,563,660 | 1,929,710 | 1,636,430 | 1,348,790 |
| Return on total capital | 25.06% | 22.86% | 23.87% | 14.97% | 17.50% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $886,343K ÷ ($1,327,160K + $2,209,620K)
= 25.06%
Topbuild Corp's return on total capital has displayed fluctuations over the past five years. The trend suggests that the company's ability to generate profit relative to its total capital has improved overall. In 2020, the return on total capital was 17.50%, which decreased slightly to 14.97% in 2021. However, there was a notable upturn in performance in the subsequent years, with the return on total capital reaching 23.87% in 2022, 22.86% in 2023, and peaking at 25.06% in 2024.
These variations in return on total capital may indicate changes in the company's efficiency in utilizing its total capital to generate earnings. The upward trajectory observed from 2021 to 2024 suggests improvements in operational effectiveness or strategic decision-making that have positively impacted the company's profitability relative to its total invested capital. It is crucial for Topbuild Corp to continue monitoring and optimizing its return on total capital to sustain and enhance its financial performance in the future.