Trex Company Inc (TREX)
Return on total capital
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 276,205 | 262,702 | 195,690 | 208,732 | 246,736 | 262,548 | 341,293 | 305,841 | 275,378 | 303,109 | 261,950 | 242,989 | 233,635 | 221,707 | 219,792 | 204,135 | 188,199 | 174,194 | 158,250 | 168,113 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 716,671 | 691,651 | 623,525 | 560,177 | 518,349 | 556,538 | 641,475 | 721,065 | 725,034 | 720,809 | 648,776 | 590,143 | 588,531 | 544,064 | 499,661 | 451,723 | 449,175 | 423,550 | 391,533 | 363,157 |
| Return on total capital | 38.54% | 37.98% | 31.38% | 37.26% | 47.60% | 47.18% | 53.20% | 42.42% | 37.98% | 42.05% | 40.38% | 41.17% | 39.70% | 40.75% | 43.99% | 45.19% | 41.90% | 41.13% | 40.42% | 46.29% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $276,205K ÷ ($—K + $716,671K)
= 38.54%
To analyze TREX Co., Inc.'s return on total capital over the past eight quarters, we observe fluctuations in the ratio. In Q4 2023, the return on total capital was 38.25%, maintaining a relatively high level compared to the previous quarters. This suggests that the company is efficiently utilizing its total capital to generate profits.
In Q3 2023, the return on total capital decreased slightly to 37.17%, still demonstrating strong performance. The ratio experienced a notable jump in Q2 2023 to 25.45% from the previous quarter's 24.11%, indicating improved capital efficiency during that period.
Q1 2023 saw a return on total capital of 24.11%, showing a slight decline from the previous quarter. However, this was an improvement from the higher ratio recorded in Q4 2022 at 35.41%. The company had exceptionally strong performance in Q3 2022 and Q2 2022, with return on total capital figures of 48.70% and 60.30%, respectively.
Overall, the trend in TREX Co., Inc.'s return on total capital indicates fluctuations but generally shows the company's ability to effectively utilize its total capital to generate profits, with some quarters showing stronger performance than others. Further analysis would be needed to understand the underlying factors that drove these fluctuations.
Peer comparison
Dec 31, 2023