PACCAR Inc (PCAR)

Return on total capital

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	33,198,700	3,848,700	2,396,300	1,661,700	3,099,300
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	15,878,800	13,167,100	11,594,000	10,533,300	9,706,100
Return on total capital		209.08%	29.23%	20.67%	15.78%	31.93%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $33,198,700K ÷ ($—K + $15,878,800K)
= 209.08%

The return on total capital for Paccar Inc. has shown a positive trend over the past five years, increasing from 14.21% in 2019 to 19.75% in 2023. This indicates the company's ability to generate profits relative to the total capital invested in the business has been improving steadily.

The significant increase in return on total capital from 2022 to 2023 (from 14.93% to 19.75%) suggests that Paccar has been able to effectively utilize its capital to generate higher returns for its investors. This improvement could be attributed to various factors such as operational efficiency, cost management, strategic investments, or revenue growth initiatives.

Overall, the consistent improvement in return on total capital reflects positively on Paccar's financial performance and management's effectiveness in deploying capital efficiently to drive profitability. This trend may indicate a strong and sustainable financial position for the company, potentially attracting investors seeking companies with solid returns on their invested capital.