Medpace Holdings Inc (MEDP)
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 | 446,870 | 336,825 | 278,697 | 198,615 | 167,042 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 825,545 | 558,950 | 386,387 | 952,928 | 805,779 |
| Return on total capital | 54.13% | 60.26% | 72.13% | 20.84% | 20.73% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $446,870K ÷ ($—K + $825,545K)
= 54.13%
Based on the data provided, Medpace Holdings Inc's return on total capital has shown a positive trend over the years.
The return on total capital increased steadily from 20.73% on December 31, 2020, to 20.84% on December 31, 2021. This indicates the company's ability to generate profits relative to the total capital invested.
However, there was a significant spike in the return on total capital to 72.13% on December 31, 2022, followed by a slight decrease to 60.26% on December 31, 2023, and a further decline to 54.13% on December 31, 2024.
The sharp increase in 2022 suggests the company experienced a period of high profitability relative to its total capital. It's important to investigate the cause of this spike and the subsequent decline in the following years to assess if it was a one-time event or a sustained improvement.
Overall, Medpace Holdings Inc has delivered healthy returns on its total capital, but investors and analysts should closely monitor future trends to understand the sustainability of these levels of return.
Peer comparison
Dec 31, 2024