Generac Holdings Inc (GNRC)
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 | 385,413 | 553,924 | 718,404 | 482,540 | 360,850 |
| Long-term debt | US$ in thousands | 1,434,820 | 1,370,970 | 882,060 | 833,990 | 832,236 |
| Total stockholders’ equity | US$ in thousands | 2,340,250 | 2,257,380 | 2,213,770 | 1,390,290 | 1,032,380 |
| Return on total capital | 10.21% | 15.27% | 23.21% | 21.69% | 19.35% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $385,413K ÷ ($1,434,820K + $2,340,250K)
= 10.21%
Generac Holdings Inc's return on total capital has shown a declining trend over the past five years. The ratio decreased from 19.27% in 2019 to 9.88% in 2023, indicating a decreasing efficiency in generating returns from the total capital employed by the company. This decline may raise concerns about the company's ability to generate profits relative to its total capital base. Further investigation into the factors contributing to this decline in return on total capital is recommended to assess the company's financial performance and competitiveness in the market.
Peer comparison
Dec 31, 2023