WW Grainger Inc (GWW)
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 | 2,565,000 | 2,552,000 | 2,488,000 | 2,361,000 | 2,215,000 | 2,088,000 | 1,923,000 | 1,723,000 | 1,547,000 | 1,405,000 | 1,347,000 | 1,218,000 | 1,019,000 | 925,000 | 877,000 | 1,048,000 | 1,252,000 | 1,358,000 | 1,208,000 | 1,168,000 |
| Long-term debt | US$ in thousands | 2,266,000 | 2,260,000 | 2,275,000 | 2,278,000 | 2,284,000 | 2,294,000 | 2,309,000 | 2,338,000 | 2,362,000 | 2,372,000 | 2,375,000 | 2,373,000 | 2,389,000 | 2,388,000 | 3,301,000 | 3,303,000 | 1,914,000 | 1,918,000 | 2,080,000 | 2,077,000 |
| Total stockholders’ equity | US$ in thousands | 3,115,000 | 3,090,000 | 2,935,000 | 2,735,000 | 2,440,000 | 2,308,000 | 2,201,000 | 2,081,000 | 1,874,000 | 1,827,000 | 1,868,000 | 1,816,000 | 1,828,000 | 2,131,000 | 1,929,000 | 1,810,000 | 1,855,000 | 1,871,000 | 1,923,000 | 1,971,000 |
| Return on total capital | 47.67% | 47.70% | 47.75% | 47.10% | 46.89% | 45.37% | 42.64% | 38.99% | 36.52% | 33.46% | 31.75% | 29.08% | 24.16% | 20.47% | 16.77% | 20.50% | 33.22% | 35.84% | 30.18% | 28.85% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $2,565,000K ÷ ($2,266,000K + $3,115,000K)
= 47.67%
Over the past eight quarters, W.W. Grainger Inc. has consistently shown a strong performance in terms of return on total capital. The return on total capital has been increasing gradually from 38.99% in Q1 2022 to 47.37% in Q4 2023. This indicates that the company has been effectively utilizing its capital to generate profits for its shareholders. The consistent rise in the return on total capital reflects the company's efficiency in generating profits relative to the total capital invested in the business. Overall, W.W. Grainger Inc. appears to be in a healthy financial position with a sustained improvement in its return on total capital metrics.