RXO Inc. (RXO)
Return on total capital
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | ||
|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 39,000 | 24,000 | 33,000 | |||
| Long-term debt | US$ in thousands | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 594,000 | 590,000 | 589,000 | 585,000 | 587,000 | 1,144,000 |
| Return on total capital | 6.57% | 4.07% | 5.60% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $39,000K ÷ ($—K + $594,000K)
= 6.57%
Return on total capital is a key financial ratio that indicates the efficiency with which a company generates profits from its total capital employed. In this case, RXO Inc.'s return on total capital has shown some variability over the past few quarters.
In the most recent quarter ending December 31, 2023, RXO Inc. achieved a return on total capital of 6.57%, representing an improvement from the previous quarter's 4.07%. This indicates that the company was able to generate a higher level of profits relative to the total capital invested during this period.
The return on total capital for the quarter ending June 30, 2023, was 5.60%, showing a slight decrease compared to the latest quarter's performance. However, it is higher than the return recorded in the previous quarter, indicating a level of stability in the company's profit generation efficiency.
Overall, while there have been fluctuations in RXO Inc.'s return on total capital in recent quarters, the upward trend in the latest quarter is a positive sign of the company's ability to generate profits relative to its total capital base. It is important for the company to continue monitoring and improving this ratio to ensure sustainable financial performance.
Peer comparison
Dec 31, 2023