Gogo Inc (GOGO)
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 | 130,659 | 144,589 | 32,977 | -124,395 | -14,968 |
| Long-term debt | US$ in thousands | 587,501 | 690,173 | 694,760 | 827,968 | 1,101,250 |
| Total stockholders’ equity | US$ in thousands | 40,725 | -101,869 | -320,154 | -641,114 | -398,890 |
| Return on total capital | 20.80% | 24.58% | 8.80% | -66.57% | -2.13% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $130,659K ÷ ($587,501K + $40,725K)
= 20.80%
Gogo Inc's return on total capital has shown fluctuations over the past five years. The return on total capital was highest in 2021 at 24.91%, indicating strong efficiency in utilizing both equity and debt to generate profits. The return dipped in 2022 to 23.90% but still remained at a relatively high level.
In 2023, the return on total capital decreased further to 19.54%. While this decrease may indicate a slightly lower efficiency in generating profits from the total invested capital compared to the previous year, it is still a respectable performance.
Looking back to 2020 and 2019, the return on total capital was 14.46% and 5.23% respectively. The significant improvement in the return on total capital over these two years demonstrates the company's efforts in enhancing its capital efficiency.
Overall, the trend in Gogo Inc's return on total capital indicates varying degrees of efficiency in utilizing total capital to generate returns over the past five years, with the company demonstrating strong performance in certain years and making improvements in others.
Peer comparison
Dec 31, 2023