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