PACCAR Inc (PCAR)
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 | 3,632,500 | 33,198,700 | 3,848,700 | 2,396,300 | 1,661,700 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 17,506,900 | 15,878,800 | 13,167,100 | 11,594,000 | 10,533,300 |
| Return on total capital | 20.75% | 209.08% | 29.23% | 20.67% | 15.78% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $3,632,500K ÷ ($—K + $17,506,900K)
= 20.75%
PACCAR Inc's return on total capital has shown a strong increasing trend over the years. As of December 31, 2020, the return on total capital stood at 15.78%, indicating the company's ability to generate profits relative to the total capital invested. By December 31, 2021, the return had increased to 20.67%, reflecting improved efficiency in capital utilization.
The trend continued to be positive as of December 31, 2022, with a significant rise in the return on total capital to 29.23%. This suggests that PACCAR Inc was able to generate higher returns relative to the total capital employed, indicating effective management of resources.
However, the return on total capital for December 31, 2023, spiked to 209.08%, which may be an outlier or a result of specific events affecting the financial statements. It would be important to investigate the cause of this abnormally high return for a more accurate assessment of the company's performance.
As of December 31, 2024, the return on total capital reverted to 20.75%, which is still a strong performance level. Overall, PACCAR Inc's return on total capital has demonstrated positive growth and efficiency in capital utilization over the years, reflecting well on the company's financial management and operational effectiveness.
Peer comparison
Dec 31, 2024