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

Company name
Symbol
Return on total capital
Frontdoor Inc
FTDR
197.06%
ABM Industries Incorporated
ABM
13.42%
Airbnb Inc
ABNB
14.95%
Rollins Inc
ROL
35.43%