CarGurus (CARG)
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 | 32,627 | 108,478 | 148,268 | 97,756 | 34,322 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 616,852 | 734,609 | 516,841 | 373,586 | 256,855 |
| Return on total capital | 5.29% | 14.77% | 28.69% | 26.17% | 13.36% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $32,627K ÷ ($—K + $616,852K)
= 5.29%
CarGurus Inc's return on total capital has shown variability over the past five years, ranging from 5.29% in 2023 to 28.69% in 2021. This ratio measures the efficiency and profitability of the company in generating returns from all sources of capital employed. The lower return in 2023 compared to previous years suggests that the company may be facing challenges in optimizing its capital investments to generate profits. This could be attributed to factors such as increased operating expenses, changes in market conditions, or ineffective capital allocation strategies. Further analysis into the company's financial performance and strategic decisions would be necessary to understand the reasons behind the fluctuating returns on total capital.
Peer comparison
Dec 31, 2023