Hertz Global Holdings Inc (HTZ)
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 | 347,000 | 2,502,000 | 806,000 | -1,973,000 | 57,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 3,092,000 | 2,645,000 | 2,977,000 | 56,000 | 1,769,000 |
| Return on total capital | 11.22% | 94.59% | 27.07% | -3,523.21% | 3.22% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $347,000K ÷ ($—K + $3,092,000K)
= 11.22%
Hertz Global Holdings Inc.'s return on total capital has shown a declining trend over the past three years. The return on total capital was 14.66% in 2021, which decreased to 12.57% in 2022, and further dropped to 4.08% in 2023. This indicates that the company's ability to generate profits from its total capital invested has weakened significantly.
A declining return on total capital could suggest inefficiencies in the company's capital utilization or declining profitability. It may also be an indication of increasing capital investment without proportionate growth in returns. Investors and stakeholders should closely monitor this trend and assess the company's strategies to improve profitability and capital efficiency in the coming periods.
Peer comparison
Dec 31, 2023