Generac Holdings Inc (GNRC)
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 | 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 | 360,850 | 373,275 | 372,605 | 364,013 |
| Long-term debt | US$ in thousands | 1,434,820 | — | — | — | 1,370,970 | — | — | 210,000 | 882,060 | 782,925 | 781,950 | 832,075 | 833,990 | 829 | 813,400 | 798,875 | 832,236 | 881,198 | 879,000 | — |
| Total stockholders’ equity | US$ in thousands | 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 | 1,032,380 | 934,264 | 865,940 | 804,420 |
| Return on total capital | 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% | 19.35% | 20.56% | 21.35% | 45.25% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (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 eight quarters, starting from 20.83% in Q1 2022 to 9.88% in Q4 2023. This indicates a decreasing efficiency in generating profits compared to the capital invested in the business. The decreasing trend suggests that the company may be facing challenges in utilizing its capital effectively to generate returns for its investors. An investigation into the factors causing this decline, such as operational inefficiencies or changes in the business environment, could help management identify areas for improvement to enhance the company's profitability in the future.
Peer comparison
Dec 31, 2023