Pool Corporation (POOL)
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 | 617,204 | 746,567 | 1,025,780 | 832,784 | 464,027 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,273,460 | 1,312,790 | 1,235,190 | 1,071,390 | 639,470 |
| Return on total capital | 48.47% | 56.87% | 83.05% | 77.73% | 72.56% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $617,204K ÷ ($—K + $1,273,460K)
= 48.47%
The return on total capital for Pool Corporation has shown a positive trend over the five-year period from December 31, 2020, to December 31, 2024. The ratio increased steadily from 72.56% in 2020 to peak at 83.05% in 2022, indicating an efficient utilization of both equity and debt to generate profits. However, there was a noticeable decline in 2023 and 2024, with the ratio dropping to 56.87% and then further down to 48.47%.
Overall, the return on total capital for Pool Corporation remained relatively high throughout the period, suggesting the company's ability to generate strong returns on the capital invested in its operations. It is important for stakeholders to closely monitor this metric to assess the company's efficiency in generating profits relative to the total capital employed.