NVR Inc (NVR)
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 | 2,143,290 | 1,956,110 | 2,292,720 | 1,643,520 | 1,118,900 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 4,210,070 | 4,364,720 | 3,506,850 | 3,002,380 | 3,103,070 |
| Return on total capital | 50.91% | 44.82% | 65.38% | 54.74% | 36.06% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $2,143,290K ÷ ($—K + $4,210,070K)
= 50.91%
The return on total capital for NVR Inc has shown a notable increase over the years, starting at 36.06% on December 31, 2020, and steadily rising to 54.74% on December 31, 2021, 65.38% on December 31, 2022, before experiencing a slight dip to 44.82% on December 31, 2023. The metric then rebounded to 50.91% by December 31, 2024.
This trend indicates that NVR Inc has been effectively utilizing its total capital to generate returns for its investors. The significant increase in returns between 2020 and 2022 demonstrates improved capital efficiency and profitability. Despite a slight drop in 2023, the company managed to recover and maintain a strong return on total capital by the end of 2024. Overall, the upward trajectory of the return on total capital suggests sound financial management and a positive outlook for the company's financial performance.
Peer comparison
Dec 31, 2024