PC Connection Inc (CNXN)
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 | 103,153 | 99,118 | 98,835 | 108,534 | 120,551 | 127,948 | 123,537 | 112,531 | 96,517 | 84,971 | 78,720 | 65,544 | 72,074 | 81,918 | 93,478 | 115,213 | 111,972 | 108,686 | 94,999 | 87,623 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 840,767 | 819,161 | 794,120 | 776,483 | 766,175 | 756,107 | 731,999 | 705,482 | 682,473 | 686,172 | 665,571 | 647,495 | 636,327 | 628,277 | 611,213 | 602,562 | 597,312 | 583,144 | 560,167 | 537,592 |
| Return on total capital | 12.27% | 12.10% | 12.45% | 13.98% | 15.73% | 16.92% | 16.88% | 15.95% | 14.14% | 12.38% | 11.83% | 10.12% | 11.33% | 13.04% | 15.29% | 19.12% | 18.75% | 18.64% | 16.96% | 16.30% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $103,153K ÷ ($—K + $840,767K)
= 12.27%
PC Connection, Inc.'s return on total capital has shown a general declining trend over the past few quarters. In Q4 2022, the return on total capital stood at the highest level of 16.92%, decreasing to 15.95% in Q1 2022. Despite this decrease, the return on total capital remained above 15% in the first half of 2022. However, from Q3 2022 to Q4 2023, there was a notable decline in the return on total capital, dropping from 16.88% to 12.59%.
This declining trend in return on total capital indicates that PC Connection, Inc. may be facing challenges in generating profits from the capital invested in the business. It is essential for the company to closely monitor and address the factors contributing to this decrease to improve overall financial performance and efficiency in capital utilization.
Peer comparison
Dec 31, 2023