TripAdvisor Inc (TRIP)
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 | 169,000 | 111,000 | -140,000 | -334,000 | 201,000 |
| Long-term debt | US$ in thousands | 839,000 | 836,000 | 833,000 | 491,000 | — |
| Total stockholders’ equity | US$ in thousands | 871,000 | 861,000 | 789,000 | 886,000 | 1,161,000 |
| Return on total capital | 9.88% | 6.54% | -8.63% | -24.26% | 17.31% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $169,000K ÷ ($839,000K + $871,000K)
= 9.88%
The return on total capital for TripAdvisor Inc. has shown variability over the past five years. In 2023, the return on total capital improved to 8.26%, a significant increase from 5.62% in 2022. This indicates that the company was able to generate a higher return relative to its total capital invested in the business during the most recent year.
However, it is important to note that the return on total capital was negative in 2021 and 2020, indicating that the company did not generate sufficient returns to cover the total capital invested during those years. The improvement in 2023 suggests that TripAdvisor Inc. may have implemented strategies to enhance the profitability of its operations and effectively utilize its capital resources.
Overall, analyzing the trend of return on total capital can provide insights into the company's ability to generate returns relative to the total capital employed, highlighting its efficiency in utilizing capital resources to drive profitability.
Peer comparison
Dec 31, 2023