Standard Motor Products Inc (SMP)
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 | 87,501 | 92,631 | 108,949 | 132,493 | 109,707 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 615,745 | 635,064 | 610,020 | 601,580 | 550,236 |
| Return on total capital | 14.21% | 14.59% | 17.86% | 22.02% | 19.94% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $87,501K ÷ ($—K + $615,745K)
= 14.21%
Standard Motor Products Inc's return on total capital has shown some fluctuations over the past five years. At the end of 2020, the return stood at 19.94%, showing a positive trend. In 2021, there was a slight improvement with a return of 22.02%, indicating efficient utilization of both debt and equity to generate profits.
However, by the end of 2022, the return on total capital decreased to 17.86%, possibly signaling challenges in optimizing its capital structure and operational efficiency. This trend continued into 2023 with a further decline to 14.59%. It is important for the company to investigate the factors contributing to this downward trend and take necessary actions to improve its return on total capital.
By the end of 2024, the return on total capital remained relatively low at 14.21%. Standard Motor Products Inc may need to reassess its capital allocation strategies and operational performance to enhance its overall profitability and ensure sustainable growth in the future.
Peer comparison
Dec 31, 2024