ProPetro Holding Corp (PUMP)
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 | 120,810 | 8,991 | -67,823 | -132,117 | 220,645 |
| Long-term debt | US$ in thousands | 45,000 | 30,000 | 0 | 0 | 130,000 |
| Total stockholders’ equity | US$ in thousands | 998,392 | 954,033 | 826,302 | 870,771 | 969,305 |
| Return on total capital | 11.58% | 0.91% | -8.21% | -15.17% | 20.07% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $120,810K ÷ ($45,000K + $998,392K)
= 11.58%
ProPetro Holding Corp's return on total capital has shown fluctuations over the past five years. In 2019, the company achieved a relatively high return on total capital of 20.07%, indicating efficient utilization of both equity and debt in generating profits. However, there was a significant decline in 2020 and 2021, with negative returns of -15.17% and -8.21% respectively, suggesting that the company's capital efficiency deteriorated during these years.
The return on total capital improved in 2022 to 0.91%, although it was still relatively low compared to historical levels. The most recent data for 2023 shows a notable increase in return on total capital to 11.58%, indicating a positive trend in capital efficiency for the company.
Overall, ProPetro Holding Corp's return on total capital has been volatile in recent years, with the company experiencing both peaks and troughs in capital efficiency. It will be important for investors and stakeholders to monitor future trends in return on total capital to assess the company's ability to generate returns from its invested capital effectively.
Peer comparison
Dec 31, 2023