Penske Automotive Group Inc (PAG)

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	1,351,500	1,421,300	1,452,500	1,459,300	1,487,800	1,508,600	1,523,700	1,538,800	1,356,400	1,242,600	1,149,000	817,700	704,500	614,800	500,000	600,400	652,700	636,500	631,000	647,900
Long-term debt	US$ in thousands	1,419,500	1,537,300	1,613,600	1,619,800	1,546,900	1,561,900	1,407,500	1,383,900	1,392,000	1,356,700	1,436,300	1,492,500	1,602,100	2,216,100	2,054,100	2,516,100	2,257,000	2,282,500	2,134,200	2,118,300
Total stockholders’ equity	US$ in thousands	4,726,200	4,523,400	4,382,100	4,323,300	4,148,000	4,063,500	4,194,800	4,138,800	4,070,000	3,842,100	3,738,700	3,462,200	3,302,500	3,064,300	2,759,900	2,689,700	2,793,400	2,638,900	2,640,500	2,641,200
Return on total capital		21.99%	23.45%	24.23%	24.55%	26.13%	26.82%	27.20%	27.86%	24.83%	23.90%	22.20%	16.50%	14.36%	11.64%	10.39%	11.53%	12.92%	12.93%	13.22%	13.61%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $1,351,500K ÷ ($1,419,500K + $4,726,200K)
= 21.99%

Over the past eight quarters, Penske Automotive Group Inc's return on total capital has shown a general declining trend, decreasing from 22.61% in Q4 2022 to 16.65% in Q4 2023. This indicates a decreasing ability of the company to generate profits relative to the total capital employed in its operations. Despite the fluctuations in the ratio over the quarters, the values have consistently been above 15%, which suggests that the company has been relatively efficient in utilizing its capital to generate returns for its stakeholders. However, management may need to closely monitor the trend and take strategic actions to improve the return on total capital in the future quarters.