Frontdoor Inc (FTDR)
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 | 268,000 | 124,000 | 206,000 | 206,000 | 266,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 136,000 | 61,000 | 2,000 | -61,000 | -179,000 |
| Return on total capital | 197.06% | 203.28% | 10,300.00% | — | — |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $268,000K ÷ ($—K + $136,000K)
= 197.06%
Frontdoor Inc.'s return on total capital has exhibited fluctuations over the past five years. In 2023, the return on total capital increased significantly to 36.53% from 23.13% in 2022. This improvement suggests that the company is generating a higher return relative to its total capital employed in the business.
Comparing 2023 to prior years, the return on total capital was lower than the 37.90% recorded in 2021 but higher than the 23.52% reported in 2020. The trend indicates variability in the company's efficiency in utilizing its capital to generate profits.
The return on total capital for 2023 is also higher than the 32.71% in 2019, signifying an upward trend in the company's capital efficiency over the last five years. This consistent improvement could be indicative of effective capital allocation strategies or operational enhancements implemented by Frontdoor Inc.
Overall, the variation in Frontdoor Inc.'s return on total capital over the past five years reflects changes in the company's profitability relative to its invested capital, highlighting the importance of monitoring and analyzing this key financial metric for assessing business performance.
Peer comparison
Dec 31, 2023