PC Connection Inc (CNXN)
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 | 97,062 | 103,153 | 120,552 | 96,517 | 73,303 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 910,990 | 840,767 | 766,175 | 682,473 | 636,327 |
| Return on total capital | 10.65% | 12.27% | 15.73% | 14.14% | 11.52% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $97,062K ÷ ($—K + $910,990K)
= 10.65%
Based on the provided data, the return on total capital for PC Connection Inc has shown variability over the past five years. In December 2020, the return on total capital was 11.52%, which increased to 14.14% by December 2021, indicating an improvement in the company's efficiency in generating returns from its total capital.
The trend continued to strengthen in December 2022, with the return on total capital reaching 15.73%, reflecting a higher level of profitability relative to the invested capital. However, there was a slight decline in December 2023, where the return decreased to 12.27%. This could be attributed to various factors impacting the company's operations or investments during that period.
By the end of December 2024, the return on total capital further declined to 10.65%, indicating a decrease in the efficiency of utilizing total capital to generate returns. It is important for the company to assess the reasons behind this decline and take appropriate measures to improve its profitability and efficiency in capital utilization in the future.
Peer comparison
Dec 31, 2024