Fastenal Company (FAST)
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 | 1,532,800 | 1,454,300 | 1,217,500 | 1,142,400 | 1,057,600 |
| Long-term debt | US$ in thousands | 200,000 | 353,200 | 330,000 | 365,000 | 342,000 |
| Total stockholders’ equity | US$ in thousands | 3,348,800 | 3,163,200 | 3,042,200 | 2,733,200 | 2,665,600 |
| Return on total capital | 43.19% | 41.36% | 36.10% | 36.87% | 35.16% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,532,800K ÷ ($200,000K + $3,348,800K)
= 43.19%
Fastenal Co.'s return on total capital has shown consistent improvement over the past five years. The ratio increased from 35.08% in 2019 to 42.36% in 2023, indicating the company's ability to generate higher returns relative to its total capital employed. This upward trend suggests that Fastenal Co. has been effectively utilizing its capital resources to generate profits. The continuous improvement in return on total capital signifies the company's efficient use of both equity and debt financing to drive profitability and create value for its stakeholders. Overall, Fastenal Co.'s strong return on total capital performance reflects its successful operational and financial management strategies.
Peer comparison
Dec 31, 2023