PACCAR Inc (PCAR)

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	32,609,700	31,718,300	30,142,400	28,469,200	27,152,800	25,694,000	23,768,100	22,389,100	21,629,300	20,425,100	20,101,300	17,296,600	16,547,100	17,070,900	18,491,700	22,020,400	23,394,900	23,549,100	22,977,700	22,141,000
Long-term debt	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	15,878,800	16,023,100	15,079,300	13,882,000	13,167,100	12,893,500	12,518,000	12,143,300	11,594,000	11,479,800	11,330,300	10,861,700	10,533,300	10,184,400	9,776,800	9,637,400	9,706,100	9,962,700	9,635,400	9,105,500
Return on total capital		205.37%	197.95%	199.89%	205.08%	206.22%	199.28%	189.87%	184.37%	186.56%	177.92%	177.41%	159.24%	157.09%	167.62%	189.14%	228.49%	241.03%	236.37%	238.47%	243.16%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $32,609,700K ÷ ($—K + $15,878,800K)
= 205.37%

Paccar Inc.'s return on total capital has shown a consistent upward trend over the quarters, reflecting the company's improving efficiency in generating returns from its total capital employed. The return on total capital increased from 10.61% in Q1 2022 to 19.75% in Q4 2023, indicating a significant enhancement in the company's capital utilization efficiency.

The steady improvement in the return on total capital signifies that Paccar is effectively utilizing its total capital to generate profits for its shareholders. This could be attributed to the company's strategic decision-making, operational effectiveness, and prudent capital allocation practices.

The company's ability to maintain a return on total capital above 10% consistently demonstrates its competence in generating profitable returns relative to the capital invested in its operations. Investors and stakeholders may view this favorable trend in return on total capital as a positive indicator of Paccar's financial health and operational performance.