Wingstop Inc (WING)

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	112,594	91,933	73,756	57,390	42,901
Long-term debt	US$ in thousands	712,327	706,846	469,394	466,933	307,669
Total stockholders’ equity	US$ in thousands	-457,366	-390,861	-309,525	-341,310	-209,428
Return on total capital		44.16%	29.09%	46.14%	45.68%	43.67%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $112,594K ÷ ($712,327K + $-457,366K)
= 44.16%

Wingstop Inc's return on total capital has exhibited fluctuating trends over the past five years.

In 2023, the return on total capital increased significantly to 44.16%, showing a strong performance in generating returns from the total capital employed. This improvement could be attributed to effective capital allocation and operational efficiency.

The 2022 return on total capital stood at 29.09%, indicating a slight decrease compared to the previous year. This dip may raise concerns about the company's ability to efficiently utilize its total capital to generate returns for its investors.

However, in 2021, Wingstop Inc saw a notable increase in return on total capital to 46.14%, showcasing a robust performance and efficient capital management strategies.

Similarly, in 2020 and 2019, the company maintained relatively high return on total capital levels of 45.68% and 43.67%, respectively. These consistent strong returns suggest a solid track record of effectively utilizing the total capital to generate profits for the business.

Overall, Wingstop Inc's return on total capital has displayed varying performance levels across the years, demonstrating the importance of continuous monitoring and strategic capital management to ensure sustainable profitability.