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.