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.