Expedia Group Inc. (EXPE)
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 | 1,372,000 | 824,000 | 310,000 | -2,675,000 | 941,000 |
| Long-term debt | US$ in thousands | 6,253,000 | 6,240,000 | 7,715,000 | 8,216,000 | 4,189,000 |
| Total stockholders’ equity | US$ in thousands | 1,534,000 | 2,283,000 | 2,057,000 | 1,510,000 | 3,967,000 |
| Return on total capital | 17.62% | 9.67% | 3.17% | -27.50% | 11.54% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,372,000K ÷ ($6,253,000K + $1,534,000K)
= 17.62%
Expedia Group Inc's return on total capital has varied significantly over the past five years, with the highest return observed in 2023 at 18.94% and the lowest in 2020 at -15.41%. This ratio indicates the efficiency with which the company generates profits from its total capital employed, considering both debt and equity.
The increasing trend from 2019 to 2023 suggests that Expedia Group has been improving its ability to generate earnings relative to its invested capital. This improvement reflects positively on the company's operational performance and capital management strategies during this period.
However, the negative return on total capital in 2020 indicates that the company's capital utilization was inefficient, possibly due to a combination of factors such as lower revenues, higher expenses, or poor investment decisions.
Overall, Expedia Group's return on total capital has shown volatility over the years, emphasizing the importance of consistently monitoring and evaluating the company's capital efficiency to drive sustainable profitability and shareholder value.
Peer comparison
Dec 31, 2023