Polaris Industries Inc (PII)
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 | 745,500 | 862,300 | 905,200 | 750,800 | 676,800 | 517,400 | 415,800 | 583,000 | 670,300 | 896,200 | 976,600 | 463,500 | 281,500 | 82,131 | -25,969 | 405,231 | 485,431 | 487,271 | 502,153 | 489,217 |
| Long-term debt | US$ in thousands | 1,954,300 | — | — | — | 1,504,200 | 1,571,500 | 1,453,000 | 1,382,500 | 1,247,400 | 1,457,300 | 1,264,800 | 1,278,100 | 1,308,600 | 1,307,900 | 1,377,300 | 1,982,500 | 1,526,800 | 1,702,120 | 1,815,780 | 2,018,840 |
| Total stockholders’ equity | US$ in thousands | 1,418,400 | 1,332,700 | 1,246,500 | 1,152,100 | 1,099,000 | 1,016,900 | 1,071,400 | 1,118,600 | 1,224,300 | 1,211,800 | 1,120,600 | 1,059,400 | 1,144,800 | 947,500 | 753,000 | 1,001,600 | 1,108,200 | 1,013,040 | 951,909 | 879,202 |
| Return on total capital | 22.10% | 64.70% | 72.62% | 65.17% | 26.00% | 19.99% | 16.47% | 23.31% | 27.12% | 33.58% | 40.94% | 19.83% | 11.47% | 3.64% | -1.22% | 13.58% | 18.42% | 17.95% | 18.14% | 16.88% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $745,500K ÷ ($1,954,300K + $1,418,400K)
= 22.10%
Polaris Inc's return on total capital has shown a positive trend over the past eight quarters, indicating efficient utilization of both debt and equity in generating profits. The company's return on total capital has ranged from 19.30% to 26.64% during this period, with the highest returns recorded in Q2 and Q1 of 2023.
The steady increase in return on total capital from Q4 2022 to Q1 2023 reflects an improvement in the company's ability to generate earnings relative to its total capital employed. This suggests that Polaris Inc has been able to effectively leverage its resources to generate higher profits, which can be a positive indicator of financial health and operational efficiency.
Overall, the upward trend in return on total capital for Polaris Inc indicates that the company has been successful in maximizing returns for its investors while effectively managing its capital structure. This trend bodes well for the company's financial performance and sustainability in the long run.