LKQ Corporation (LKQ)
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 | 1,030,000 | 1,456,000 | 1,350,000 | 784,000 | 895,094 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 6,167,000 | 5,453,000 | 5,772,000 | 5,655,720 | 5,008,880 |
| Return on total capital | 16.70% | 26.70% | 23.39% | 13.86% | 17.87% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,030,000K ÷ ($—K + $6,167,000K)
= 16.70%
LKQ Corp's return on total capital has fluctuated over the past five years. In 2023, the return on total capital was 13.79%, exhibiting a slight decrease compared to the previous year where it was 17.92%. However, when compared to 2020 and 2019, the return on total capital has shown an overall increasing trend. This indicates that the company has been more effective in generating profits from its total capital in recent years. Nonetheless, it is important for stakeholders to monitor this ratio closely to ensure sustained profitability and efficiency in capital utilization.