Churchill Downs Incorporated (CHDN)
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 | 863,000 | 830,200 | 756,100 | 428,300 | 88,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,083,600 | 893,600 | 551,500 | 306,800 | 367,100 |
| Return on total capital | 79.64% | 92.91% | 137.10% | 139.60% | 23.97% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $863,000K ÷ ($—K + $1,083,600K)
= 79.64%
Churchill Downs Incorporated's return on total capital has shown significant fluctuations over the years based on the provided data. At the end of December 31, 2020, the company's return on total capital stood at 23.97%. By December 31, 2021, there was a substantial increase to 139.60%, indicating a strong performance in generating returns relative to the total capital employed.
The trend continued to December 31, 2022, with a slight decrease to 137.10%, still significantly above the initial value. However, by December 31, 2023, the return on total capital dropped to 92.91%, showing a notable decrease from the previous year. This decline persisted into December 31, 2024, where the return on total capital further decreased to 79.64%.
The fluctuations in the return on total capital suggest varying levels of efficiency and profitability in utilizing the company's total capital resources over the years. It is essential for Churchill Downs Incorporated to assess the factors contributing to these changes and implement strategies to maintain or improve its return on total capital in the future for sustained financial performance.