Liquidity Services Inc (LQDT)
Return on total capital
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 23,404 | 26,105 | 47,405 | 27,168 | -3,897 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 182,560 | 161,533 | 154,536 | 135,015 | 111,815 |
| Return on total capital | 12.82% | 16.16% | 30.68% | 20.12% | -3.49% |
September 30, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $23,404K ÷ ($—K + $182,560K)
= 12.82%
Liquidity Services Inc's return on total capital has exhibited fluctuations over the past five years. The company achieved a return on total capital of 12.82% in 2024, which represents a decrease from the previous year's figure of 16.16%. This could suggest a potential decline in the company's efficiency in generating returns from its total capital utilization.
In comparison, Liquidity Services Inc experienced a significant increase in return on total capital in 2022, reaching 30.68%, which marked a notable improvement from the preceding year. This surge implies enhanced effectiveness in utilizing its total capital to generate profits during that period.
The return on total capital in 2021 was 20.12%, indicating a solid performance in capital utilization, albeit lower than the exceptional return in 2022. It is worth noting that in 2020, the company reported a negative return on total capital of -3.49%, signifying a period of inefficient capital deployment or potential financial challenges.
Overall, while Liquidity Services Inc has shown fluctuations in its return on total capital in recent years, it is crucial for the company to consistently monitor and improve its capital allocation strategies to sustain profitability and drive long-term value creation for its stakeholders.
Peer comparison
Sep 30, 2024