Group 1 Automotive Inc (GPI)

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	968,600	1,015,900	1,034,200	1,047,900	1,091,400	1,079,100	1,040,700	1,018,700	884,400	814,400	760,000	576,500	495,700	432,500	328,700	346,800	363,700	341,900	336,800	348,900
Long-term debt	US$ in thousands	840,900	843,000	845,100	847,200	849,200	851,200	853,300	855,700	831,300	629,300	631,000	632,600	634,300	638,100	636,900	586,100	40,700	888,800	913,559	—
Total stockholders’ equity	US$ in thousands	2,674,400	2,611,400	2,518,900	2,352,500	2,237,500	2,214,100	2,004,500	1,949,200	1,825,200	1,918,600	1,754,000	1,576,600	1,449,600	1,356,900	1,215,900	1,174,600	1,255,700	1,186,300	1,164,100	1,127,700
Return on total capital		27.55%	29.41%	30.74%	32.75%	35.36%	35.20%	36.42%	36.32%	33.29%	31.96%	31.87%	26.10%	23.79%	21.68%	17.74%	19.70%	28.05%	16.48%	16.21%	30.94%

December 31, 2023 calculation

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

The return on total capital for Group 1 Automotive, Inc. has demonstrated a decreasing trend over the past eight quarters, starting at 21.94% in Q1 2022 and reaching 15.80% in Q4 2023. This downward trend indicates a potential decline in the company's efficiency in generating profits from its total invested capital. Despite the fluctuations, the return on total capital has remained at relatively healthy levels above 15% throughout the period, suggesting that the company is still effective in utilizing its capital resources to generate returns for its investors. However, management may need to closely monitor and assess the factors influencing this trend to ensure sustained profitability and efficient capital allocation in the future.