Granite Construction Incorporated (GVA)
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 | 92,328 | 108,886 | 50,548 | -121,199 | -54,427 |
| Long-term debt | US$ in thousands | 614,781 | 286,934 | 331,191 | 330,522 | 356,108 |
| Total stockholders’ equity | US$ in thousands | 977,298 | 953,016 | 967,682 | 975,664 | 1,141,470 |
| Return on total capital | 5.80% | 8.78% | 3.89% | -9.28% | -3.63% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $92,328K ÷ ($614,781K + $977,298K)
= 5.80%
Granite Construction Inc.'s return on total capital has shown fluctuation over the past five years. In 2023, the return on total capital was 4.75%, a decrease from the previous year's 8.90%. Although the return decreased, it still indicates that Granite generated a positive return on its total capital investment.
Compared to 2021 and 2020 where the return on total capital was 5.04% and 0.02% respectively, the company's performance improved in 2023. However, it is worth noting that in 2019, Granite Construction Inc. had a negative return on total capital of -4.97%, indicating that the company was not effectively utilizing its total capital to generate profits.
Overall, Granite Construction Inc. needs to focus on improving its return on total capital to ensure efficient use of capital resources and maximize profitability for its shareholders.
Peer comparison
Dec 31, 2023