Cars.com Inc (CARS)
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 | 54,116 | 66,036 | 48,338 | -887,327 | -446,060 |
| Long-term debt | US$ in thousands | 460,119 | 458,249 | 457,383 | 576,143 | 611,277 |
| Total stockholders’ equity | US$ in thousands | 492,108 | 384,430 | 398,020 | 368,190 | 1,141,070 |
| Return on total capital | 5.68% | 7.84% | 5.65% | -93.96% | -25.46% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $54,116K ÷ ($460,119K + $492,108K)
= 5.68%
The return on total capital for Cars.com has shown variability over the past five years, as depicted in the data provided. The return on total capital has generally been increasing from 0.86% in 2019 to 7.71% in 2022, before experiencing a slight decrease to 5.55% in 2023. This indicates that the company has been able to generate more profit relative to its total capital deployed in recent years, which is a positive trend.
Although the return on total capital decreased slightly in 2023 compared to the prior year, it is still higher than in 2021 and significantly higher than in 2020 and 2019. This suggests that Cars.com has been effectively utilizing its capital to generate returns for its stakeholders.
Overall, while there was a slight decline in the return on total capital in 2023, the general trend has been positive, reflecting improving efficiency in capital utilization by Cars.com.
Peer comparison
Dec 31, 2023