Warner Music Group (WMG)
Return on total capital
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 790,000 | 714,000 | 609,000 | -229,000 | 356,000 |
| Long-term debt | US$ in thousands | 3,964,000 | 3,732,000 | 3,346,000 | 3,104,000 | 2,974,000 |
| Total stockholders’ equity | US$ in thousands | 307,000 | 152,000 | 31,000 | -63,000 | -289,000 |
| Return on total capital | 18.50% | 18.38% | 18.03% | -7.53% | 13.26% |
September 30, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $790,000K ÷ ($3,964,000K + $307,000K)
= 18.50%
Warner Music Group's return on total capital has shown a positive trend in recent years, increasing from 13.26% in 2019 to 18.50% in 2023. This indicates the company's ability to generate a return on the total capital employed in its operations. In 2020, there was a significant decline in the return on total capital to -7.53%, which may have been a result of challenges or inefficiencies faced by the company during that period. However, Warner Music Group was able to recover from this decline and improve its return on total capital in the following years. Overall, the upward trend in the return on total capital suggests that Warner Music Group has been effectively utilizing its capital to generate profits for its stakeholders.
Peer comparison
Sep 30, 2023