Graco Inc (GGG)
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 | 613,993 | 575,621 | 518,680 | 385,931 | 418,987 |
| Long-term debt | US$ in thousands | 0 | 75,000 | 75,000 | 150,000 | 164,298 |
| Total stockholders’ equity | US$ in thousands | 2,224,220 | 1,859,650 | 1,709,340 | 1,283,900 | 1,024,930 |
| Return on total capital | 27.60% | 29.75% | 29.07% | 26.91% | 35.23% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $613,993K ÷ ($0K + $2,224,220K)
= 27.60%
Graco Inc's return on total capital has shown a general trend of stability and strong performance over the past five years. The company achieved a return on total capital of 27.60% in 2023, which represents a slight decrease compared to the prior year but remains at a robust level. In 2022 and 2021, the return on total capital was 29.75% and 29.07%, respectively, indicating consistent profitability and efficient capital utilization.
Although there was a slight dip in 2020 when the return on total capital stood at 26.91%, the company quickly rebounded in 2019 with a notable return of 35.23%. This suggests that Graco Inc has historically been successful in generating profits relative to its total capital employed, indicating effective management of resources and strong operational performance.
Overall, the company's ability to consistently deliver strong returns on total capital reflects its efficiency in generating profits from its investments and operations, which can be viewed positively by investors and stakeholders as a key indicator of financial health and sustainability.
Peer comparison
Dec 31, 2023