MGP Ingredients Inc (MGPI)
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 | 76,881 | 148,393 | 145,623 | 97,911 | 54,241 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 834,166 | 850,492 | 745,644 | 644,265 | 262,526 |
| Return on total capital | 9.22% | 17.45% | 19.53% | 15.20% | 20.66% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $76,881K ÷ ($—K + $834,166K)
= 9.22%
The return on total capital for MGP Ingredients Inc has displayed some fluctuations over the years based on the provided data. In 2020, the return on total capital was reported at 20.66%, indicating a strong performance in utilizing its total capital to generate profits. However, this metric experienced a slight decline in 2021 to 15.20%, possibly due to changes in the company's capital structure or operational efficiency.
In 2022, the return on total capital improved to 19.53%, showcasing a positive trend in the company's ability to generate returns relative to its total capital employed. The following year, in 2023, the return on total capital decreased to 17.45%, suggesting a slight reduction in the company's overall efficiency in deploying its capital to generate profits.
By the end of 2024, there was a significant decline in the return on total capital to 9.22%, indicating a substantial decrease in the company's ability to generate returns relative to its total capital compared to previous years. This decline may warrant further investigation into the factors influencing the company's profitability and capital utilization strategies.
Overall, while MGP Ingredients Inc has shown fluctuations in its return on total capital over the years, it is essential for the company to closely monitor and analyze these trends to ensure optimal capital allocation and sustainable profitability in the future.