Graham Holdings Co (GHC)
Return on total capital
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 355,889 | 306,401 | 365,181 | 115,907 | 172,782 | 237,968 | 224,038 | 462,661 | 482,318 | 704,987 | 776,820 | 679,240 | 445,975 | 304,199 | 254,458 | 268,494 | 456,234 | 339,677 | 415,755 | 413,419 |
| Long-term debt | US$ in thousands | 745,082 | 739,806 | 565,564 | 568,101 | 570,547 | 568,534 | 511,574 | 523,102 | 525,752 | 511,635 | 506,079 | 506,091 | 506,103 | 509,282 | 505,672 | 430,317 | 430,650 | 420,535 | 497,094 | 500,238 |
| Total stockholders’ equity | US$ in thousands | 3,975,740 | 3,688,500 | 3,809,480 | 3,747,220 | 3,731,380 | 4,259,710 | 4,308,690 | 4,460,160 | 4,399,580 | 3,963,840 | 3,968,090 | 3,857,620 | 3,759,300 | 3,239,810 | 3,206,670 | 3,206,060 | 3,319,240 | 3,052,010 | 3,032,810 | 2,993,600 |
| Return on total capital | 7.54% | 6.92% | 8.35% | 2.69% | 4.02% | 4.93% | 4.65% | 9.28% | 9.79% | 15.75% | 17.36% | 15.57% | 10.46% | 8.11% | 6.85% | 7.38% | 12.17% | 9.78% | 11.78% | 11.83% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $355,889K ÷ ($745,082K + $3,975,740K)
= 7.54%
To analyze Graham Holdings Co.'s return on total capital over the past eight quarters, we observe that the figures have fluctuated within a range of 2.41% to 4.71%. The return on total capital was highest in Q4 2022 at 4.71% and lowest in Q1 2022 at 2.41%.
Overall, the return on total capital has shown an increasing trend from Q1 2022 to Q2 2023, indicating improved efficiency in generating returns relative to the total capital employed. However, there was a slight decrease in Q4 2023 compared to the previous quarter.
It is important for the company to sustain or improve its return on total capital in the future to ensure effective utilization of its capital resources and generate optimal returns for its shareholders. Monitoring this ratio closely will provide insights into the company's profitability and efficiency in deploying its capital.
Peer comparison
Dec 31, 2023