The Wendy’s Co (WEN)
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 | 403,479 | 365,824 | 349,763 | 270,532 | 287,452 |
| Long-term debt | US$ in thousands | 2,732,810 | 2,822,200 | 2,356,420 | 2,218,160 | 2,257,560 |
| Total stockholders’ equity | US$ in thousands | 309,779 | 465,720 | 436,405 | 549,596 | 516,359 |
| Return on total capital | 13.26% | 11.13% | 12.52% | 9.77% | 10.36% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $403,479K ÷ ($2,732,810K + $309,779K)
= 13.26%
Wendy's Co has shown a consistent improvement in its return on total capital over the past five years, with the ratio increasing from 8.67% in 2019 to 10.42% in 2023. This indicates that the company is becoming more efficient in generating profits relative to its total capital employed. The upward trend in return on total capital reflects Wendy's ability to effectively utilize its capital resources to generate earnings for its shareholders. This consistent improvement suggests that Wendy's is effectively managing its assets and liabilities to enhance profitability. Overall, the increasing return on total capital is a positive indicator for Wendy's Co's financial performance and efficiency in utilizing its capital resources.
Peer comparison
Dec 31, 2023