CarGurus (CARG)

Return on total capital

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 32,627 84,513 90,074 95,878 108,478 122,781 134,201 149,136 148,268 137,805 141,296 111,528 97,756 77,930 44,067 38,906 34,322 27,589 23,762 24,167
Long-term debt US$ in thousands — — — — — — — — — — — — — — — — — — — —
Total stockholders’ equity US$ in thousands 616,852 716,994 700,854 695,808 734,609 577,931 461,835 464,865 516,841 589,256 549,181 508,655 373,586 338,259 295,855 277,968 256,855 237,102 222,386 211,009
Return on total capital 5.29% 11.79% 12.85% 13.78% 14.77% 21.24% 29.06% 32.08% 28.69% 23.39% 25.73% 21.93% 26.17% 23.04% 14.89% 14.00% 13.36% 11.64% 10.69% 11.45%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $32,627K ÷ ($—K + $616,852K)
= 5.29%

CarGurus Inc's return on total capital has exhibited a decreasing trend over the past 8 quarters, with Q1 2022 showing the highest return at 32.08% and Q4 2023 demonstrating the lowest return at 5.29%. This decline in the return on total capital may indicate that the company's ability to generate profits from its total capital employed has weakened over time. Factors such as inefficiencies in capital allocation, increased operating expenses, or lower revenue generation could contribute to this decrease in return on total capital. It is recommended that CarGurus Inc closely evaluates its capital utilization and operational efficiency to improve its return on total capital in the future.