MGM Resorts International (MGM)

Return on total capital

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	1,760,312	2,106,566	1,244,814	3,386,272	2,765,120	2,421,691	4,831,336	2,680,347	2,307,381	1,577,909	-692,368	-2,005,458	-547,916	2,586,344	3,195,095	4,436,802	3,529,420	1,044,201	1,240,604	1,298,616
Long-term debt	US$ in thousands	6,343,810	6,505,520	6,674,040	6,841,480	7,432,820	7,209,840	7,107,160	10,507,100	11,770,800	11,618,900	12,574,900	13,245,400	12,376,700	11,414,700	11,339,600	11,743,300	11,168,900	14,943,900	14,661,700	14,730,800
Total stockholders’ equity	US$ in thousands	3,811,170	3,965,720	4,416,170	4,839,660	4,831,530	4,841,690	5,733,570	5,065,340	6,070,640	6,829,950	6,180,180	6,306,830	6,504,730	6,861,100	7,374,790	8,173,910	7,727,260	6,060,550	6,520,480	6,786,200
Return on total capital		17.33%	20.12%	11.22%	28.99%	22.55%	20.09%	37.63%	17.21%	12.93%	8.55%	-3.69%	-10.26%	-2.90%	14.15%	17.07%	22.28%	18.68%	4.97%	5.86%	6.04%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $1,760,312K ÷ ($6,343,810K + $3,811,170K)
= 17.33%

MGM Resorts International's return on total capital has fluctuated significantly over the past eight quarters. In Q4 2023, the return on total capital was 14.96%, showing a strong performance and profitability in that period. However, in Q3 2023, the return on total capital dropped significantly to 0.30%, indicating a sharp decline in profitability compared to the previous quarter.

The company experienced negative returns on total capital in Q2 2023 (-12.66%) and Q1 2023 (-14.52%), reflecting challenges and inefficiencies in capital utilization during those periods. This downward trend in profitability continued from Q4 2022 (-13.77%) and Q3 2022 (-3.82%).

The return on total capital saw a noticeable improvement in Q2 2022 (6.24%) and Q1 2022 (6.12%), signifying enhanced capital efficiency and better profitability during those quarters.

Overall, MGM Resorts International's return on total capital has been volatile, with periods of both strong performance and significant decline. It is essential for the company to focus on effectively managing its capital resources to maintain sustainable profitability in the future.