Polaris Industries Inc (PII)
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 | 745,500 | 676,800 | 670,200 | 281,500 | 485,500 |
| Long-term debt | US$ in thousands | 1,954,300 | 1,504,200 | 1,247,400 | 1,308,600 | 1,526,800 |
| Total stockholders’ equity | US$ in thousands | 1,418,400 | 1,099,000 | 1,224,300 | 1,144,800 | 1,108,200 |
| Return on total capital | 22.10% | 26.00% | 27.11% | 11.47% | 18.43% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $745,500K ÷ ($1,954,300K + $1,418,400K)
= 22.10%
Polaris Inc's return on total capital has been relatively stable in recent years, ranging from 17.00% in 2019 to 25.38% in 2022. The company's ability to generate returns from its total invested capital dipped slightly in 2023 to 21.00%, but still remains at a favorable level. This indicates that Polaris Inc has been effectively utilizing its total capital to generate profits for its investors. Overall, the consistent performance of its return on total capital demonstrates the company's efficiency in generating returns relative to the total amount of capital it has employed in its operations over the past five years.