Warner Music Group (WMG)
Return on total capital
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 823,000 | 790,000 | 714,000 | 609,000 | -229,000 |
| Long-term debt | US$ in thousands | 4,014,000 | 3,964,000 | 3,732,000 | 3,346,000 | 3,104,000 |
| Total stockholders’ equity | US$ in thousands | 518,000 | 307,000 | 152,000 | 31,000 | -63,000 |
| Return on total capital | 18.16% | 18.50% | 18.38% | 18.03% | -7.53% |
September 30, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $823,000K ÷ ($4,014,000K + $518,000K)
= 18.16%
Warner Music Group's return on total capital has been relatively stable over the past five years, ranging from 18.50% in 2023 to 18.03% in 2021. This indicates that the company has consistently generated a strong return on the capital invested in its operations. The significant improvement in 2020 from a negative figure to 18.03% in 2021 suggests a successful turnaround in capital utilization. The slight decline in 2024 to 18.16% may be attributed to various factors such as changes in business strategy, economic conditions, or industry trends. Overall, Warner Music Group's consistent positive return on total capital reflects its ability to efficiently generate profits relative to the total capital employed.
Peer comparison
Sep 30, 2024