Liquidity Services Inc (LQDT)
Return on total capital
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 26,105 | 47,405 | 27,168 | -3,897 | -19,508 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 161,533 | 154,536 | 135,015 | 111,815 | 116,175 |
| Return on total capital | 16.16% | 30.68% | 20.12% | -3.49% | -16.79% |
September 30, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $26,105K ÷ ($—K + $161,533K)
= 16.16%
To analyze the return on total capital of Liquidity Services Inc over the past five years, we can observe a mixed trend. In 2023, the return on total capital was 16.16%, showing an increase from the previous year's 14.82%. This indicates an improvement in the company's ability to generate returns from its total capital.
In 2021, the return on total capital was notably high at 21.21%, reflecting robust performance and efficient allocation of capital. However, in 2020, the company experienced a negative return on total capital of -3.48%, indicating a decrease in the ability to generate returns compared to the invested capital.
The most significant decline in performance occurred in 2019 when the return on total capital was -16.70%. This indicates that the company experienced challenges in utilizing its total capital effectively to generate returns during that period.
Overall, while there have been fluctuations in the return on total capital, the company's recent performance in 2023 suggests an improvement in its ability to generate returns from its total capital compared to the previous year. However, it is essential for the company to consistently focus on optimizing its capital allocation to sustain and enhance its overall profitability in the long term.
Peer comparison
Sep 30, 2023