Generac Holdings Inc (GNRC)
Return on total capital
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 498,488 | 485,408 | 419,815 | 404,009 | 385,413 | 338,157 | 319,023 | 445,178 | 553,924 | 622,858 | 709,641 | 678,340 | 718,404 | 717,281 | 700,236 | 611,667 | 482,540 | 403,776 | 355,002 | 353,689 |
| Long-term debt | US$ in thousands | 1,211,250 | 1,371,880 | 1,415,940 | 1,420,620 | 1,434,820 | — | — | — | 1,370,970 | — | — | 210,000 | 882,060 | 782,925 | 781,950 | 832,075 | 833,990 | 829 | 813,400 | 798,875 |
| Total stockholders’ equity | US$ in thousands | 2,494,280 | 2,409,440 | 2,369,710 | 2,367,400 | 2,340,250 | 2,363,910 | 2,419,280 | 2,339,160 | 2,257,380 | 2,318,530 | 2,418,880 | 2,308,130 | 2,213,770 | 1,782,070 | 1,655,900 | 1,524,730 | 1,390,290 | 1,230,190 | 1,097,730 | 1,023,640 |
| Return on total capital | 13.45% | 12.84% | 11.09% | 10.67% | 10.21% | 14.30% | 13.19% | 19.03% | 15.27% | 26.86% | 29.34% | 26.94% | 23.21% | 27.96% | 28.72% | 25.95% | 21.69% | 32.80% | 18.58% | 19.41% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $498,488K ÷ ($1,211,250K + $2,494,280K)
= 13.45%
Return on total capital is a financial ratio that measures a company's ability to generate profits from its total capital employed, including both equity and debt. Looking at the data provided for Generac Holdings Inc, we observe fluctuations in the return on total capital over the period from March 31, 2020, to December 31, 2024.
The return on total capital for Generac Holdings Inc ranged from a low of 10.21% on December 31, 2023, to a high of 32.80% on September 30, 2020. This indicates that the company experienced varying levels of efficiency in generating returns on the total capital invested in its operations during the period under review.
It is worth noting that the return on total capital showed a general upward trend from September 30, 2020, to June 30, 2022, reaching its peak at 29.34%. However, the ratio started to decline thereafter, dropping to 11.09% by June 30, 2024. This decline suggests a potential decrease in the company's profitability relative to the capital invested during the latter part of the period.
Overall, it is essential for Generac Holdings Inc to effectively manage its capital utilization and operational efficiency to sustain or improve its return on total capital in the future, ensuring that the company continues to generate favorable returns for its investors and stakeholders.
Peer comparison
Dec 31, 2024