LKQ Corporation (LKQ)
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 | 1,220,000 | 1,425,000 | 1,442,000 | 1,470,560 | 995,807 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 6,017,000 | 6,167,000 | 5,453,000 | 5,771,740 | 5,655,720 |
| Return on total capital | 20.28% | 23.11% | 26.44% | 25.48% | 17.61% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,220,000K ÷ ($—K + $6,017,000K)
= 20.28%
LKQ Corporation's return on total capital has been steadily increasing over the years, reflecting strong efficiency in generating returns from the total capital employed. From 17.61% in December 2020, the return on total capital rose to 25.48% in December 2021, further increasing to 26.44% in December 2022.
However, there was a slight dip in the return on total capital to 23.11% in December 2023, followed by a decrease to 20.28% in December 2024. Despite the recent decline, the overall trend indicates that LKQ Corporation has been effectively utilizing its total capital to generate returns for its stakeholders.
The company may want to further investigate the factors contributing to the fluctuations in the return on total capital to sustain or improve its performance in the future.