Trex Company Inc (TREX)
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 | 276,204 | 246,735 | 275,376 | 233,635 | 188,199 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 716,671 | 518,349 | 725,034 | 588,531 | 449,175 |
| Return on total capital | 38.54% | 47.60% | 37.98% | 39.70% | 41.90% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $276,204K ÷ ($—K + $716,671K)
= 38.54%
The return on total capital for TREX Co., Inc. has shown a fluctuating trend over the past five years. The company achieved a return on total capital of 38.25% as of December 31, 2023, a slight increase from the previous year's 35.41%. In 2021, the return on total capital was notably high at 44.26%, indicating efficient utilization of both debt and equity to generate profits. However, in 2020 and 2019, the return on total capital was slightly lower at 39.70% and 41.90%, respectively.
The fluctuations in the return on total capital suggest that TREX Co., Inc. has been effectively managing its capital structure and investment decisions to generate returns for its investors. It is crucial for the company to continue monitoring and optimizing its capital allocation strategies to ensure sustainable profitability and long-term growth.
Peer comparison
Dec 31, 2023