Garmin Ltd (GRMN)
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 | 1,092,160 | 1,027,840 | 1,218,620 | 1,054,240 | 945,586 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 7,012,060 | 6,204,340 | 6,114,160 | 5,516,120 | 4,793,500 |
| Return on total capital | 15.58% | 16.57% | 19.93% | 19.11% | 19.73% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,092,160K ÷ ($—K + $7,012,060K)
= 15.58%
The return on total capital for Garmin Ltd has exhibited a downward trend over the past five years, decreasing from 19.73% in 2019 to 15.58% in 2023. This suggests that the company's ability to generate profits from its total capital employed has weakened over this period. Factors such as changes in financial leverage, asset efficiency, or profitability may have contributed to this decline in return on total capital. It is crucial for Garmin Ltd to assess the underlying reasons for this trend and take strategic actions to improve its efficiency in utilizing capital resources to generate returns for its shareholders.
Peer comparison
Dec 31, 2023