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.
Peer comparison
Dec 31, 2023