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.