Standard Motor Products Inc (SMP)

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	65,803	91,174	123,958	86,683	85,948
Long-term debt	US$ in thousands	151,182	184,589	21	97	129
Total stockholders’ equity	US$ in thousands	635,064	610,020	601,580	550,236	504,228
Return on total capital		8.37%	11.47%	20.60%	15.75%	17.04%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $65,803K ÷ ($151,182K + $635,064K)
= 8.37%

Standard Motor Products, Inc.'s return on total capital has shown a declining trend over the past five years, with figures of 17.81% in 2019, 20.12% in 2020, 18.18% in 2021, 12.89% in 2022, and 12.31% in 2023. The decreasing trend indicates that the company's efficiency in generating profits from both its equity and debt capital has weakened. This could be a cause for concern as it may suggest a decrease in the company's overall profitability or inefficient utilization of its capital resources. Further analysis of the company's financial performance and operational strategies would be required to ascertain the reasons behind this declining trend and to identify potential areas for improvement.