GXO Logistics Inc (GXO)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 315,000 | 290,000 | 166,000 |
| Long-term debt | US$ in thousands | — | 1,739,000 | — |
| Total stockholders’ equity | US$ in thousands | 2,912,000 | 2,645,000 | 2,351,000 |
| Return on total capital | 10.82% | 6.61% | 7.06% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $315,000K ÷ ($—K + $2,912,000K)
= 10.82%
Return on total capital is a key financial ratio that measures a company's ability to generate profits from the total invested capital, including both equity and debt. In the case of GXO Logistics Inc, the return on total capital has shown an increasing trend over the past four years.
In 2023, GXO Logistics Inc achieved a return on total capital of 8.42%, showing improvement from the previous year's 7.53%. This indicates that the company was able to generate more profit relative to its total invested capital in 2023 compared to 2022.
Furthermore, when compared to the return on total capital of 7.67% in 2021 and 2.56% in 2020, it is evident that GXO Logistics Inc has made significant progress in efficiently utilizing its capital to generate returns for its investors and creditors.
Overall, the increasing trend in return on total capital for GXO Logistics Inc suggests improved profitability and effective capital management over the years, reflecting positively on the company's financial performance and operational efficiency.
Peer comparison
Dec 31, 2023