KAR Auction Services Inc (KAR)
Return on total capital
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 299,100 | 259,200 | 247,200 | 17,300 | 6,200 | 2,600 | -12,200 | 184,400 | 139,800 | 126,900 | 106,900 | 136,400 | 228,100 | 197,200 | 254,700 | 196,900 | 134,300 | 188,400 | 186,400 | 284,100 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,996,400 | 1,327,100 | 1,940,700 | 1,942,700 | 1,939,500 | 1,918,100 | 1,946,900 | 2,138,400 | 2,130,800 | 2,146,900 | 612,500 | 2,117,500 | 2,103,900 | 2,063,100 | 2,071,300 | 2,147,300 | 2,165,600 | 2,147,000 | 2,082,700 | 1,571,800 |
| Return on total capital | 14.98% | 19.53% | 12.74% | 0.89% | 0.32% | 0.14% | -0.63% | 8.62% | 6.56% | 5.91% | 17.45% | 6.44% | 10.84% | 9.56% | 12.30% | 9.17% | 6.20% | 8.78% | 8.95% | 18.07% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $299,100K ÷ ($—K + $1,996,400K)
= 14.98%
KAR Auction Services Inc's return on total capital has displayed fluctuations over the period under review, ranging from a high of 19.53% in September 2024 to a low of -0.63% in June 2023. The return on total capital saw a general decreasing trend from March 2020 to September 2022, with a notable decline from 18.07% in March 2020 to 5.91% in September 2022. However, there was a rebound in the subsequent quarters, with the return on total capital increasing to 14.98% by December 2024.
The return on total capital metric provides insights into the efficiency of the company in generating returns from its total capital employed in the business. A higher return on total capital indicates that the company is utilizing its capital effectively to generate profits for its shareholders.
It is important for investors and analysts to monitor the return on total capital metric over time to assess the company's performance and efficiency in capital allocation. Fluctuations in this ratio could be indicative of changes in the company's profitability, operational efficiency, or capital structure, and may warrant further investigation into the underlying factors driving these changes.
Peer comparison
Dec 31, 2024