LCI Industries (LCII)
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 | 123,428 | 553,028 | 398,410 | 222,934 | 200,210 |
| Long-term debt | US$ in thousands | 846,834 | 1,095,890 | 1,231,960 | 720,418 | 612,906 |
| Total stockholders’ equity | US$ in thousands | 1,355,040 | 1,381,010 | 1,092,880 | 908,326 | 800,672 |
| Return on total capital | 5.61% | 22.33% | 17.14% | 13.69% | 14.16% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $123,428K ÷ ($846,834K + $1,355,040K)
= 5.61%
The return on total capital for LCI Industries has exhibited fluctuations over the past five years. In 2023, the return on total capital decreased to 5.60% from the previous year's level of 22.12% in 2022. This decline indicates a decrease in the company's ability to generate profits from its total capital employed during that period.
Comparing the 2023 return on total capital to the levels in 2021, 2020, and 2019, we observe a similar trend of declining returns over the years. The return on total capital was 16.63% in 2021, 13.54% in 2020, and 13.99% in 2019. This indicates a general downward trend in the company's ability to efficiently utilize its total capital to generate returns for its investors.
Overall, the declining trend in LCI Industries' return on total capital over the past five years may suggest potential inefficiencies in the company's capital utilization or operational performance. It is essential for the company to address these issues and improve its profitability metrics to enhance shareholder value in the future.
Peer comparison
Dec 31, 2023