Group 1 Automotive Inc (GPI)

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 968,600 1,091,400 884,400 495,700 358,300
Long-term debt US$ in thousands 840,900 849,200 831,300 634,300 40,700
Total stockholders’ equity US$ in thousands 2,674,400 2,237,500 1,825,200 1,449,600 1,255,700
Return on total capital 27.55% 35.36% 33.29% 23.79% 27.64%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $968,600K ÷ ($840,900K + $2,674,400K)
= 27.55%

Group 1 Automotive, Inc.'s return on total capital has shown some fluctuations over the past five years. In 2023, the return on total capital decreased to 15.80% from 20.53% in 2022, but it remained higher compared to 2019 and 2020. Despite the decrease, the company still delivered a healthy return on total capital, indicating efficient use of both debt and equity to generate profits. The consistent performance in 2021 and 2022 suggests strong operational management and capital allocation strategies. The fluctuations in the return on total capital may reflect changes in the company's financial structure, profitability, and investment decisions over the years.