GXO Logistics Inc (GXO)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 401,000 | 319,000 | 368,000 | 254,000 | 92,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 3,003,000 | 2,912,000 | 2,645,000 | 2,351,000 | 2,823,000 |
| Return on total capital | 13.35% | 10.95% | 13.91% | 10.80% | 3.26% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $401,000K ÷ ($—K + $3,003,000K)
= 13.35%
Return on total capital is a key financial metric that indicates how efficiently a company utilizes its total capital to generate profits. GXO Logistics Inc's return on total capital has been showing a positive trend over the years, increasing from 3.26% as of December 31, 2020, to 13.35% as of December 31, 2024. This indicates that the company has been increasingly efficient in generating returns on the total capital employed in its operations.
The significant increase in the return on total capital from 2020 to 2024 highlights an improvement in GXO Logistics Inc's operational efficiency and effectiveness of capital allocation. The company has been able to generate higher returns relative to the total capital invested in its business activities, which is a positive indicator of financial performance and management effectiveness.
Overall, the rising trend in return on total capital for GXO Logistics Inc suggests that the company has been effectively utilizing its capital to drive profitability and create shareholder value. Investors and stakeholders may view this as a positive sign of financial health and operational excellence within the organization.
Peer comparison
Dec 31, 2024