Warner Music Group (WMG)
Return on total capital
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 874,000 | 879,000 | 790,000 | 741,000 | 698,000 | 740,000 | 714,000 | 651,000 | 667,000 | 652,000 | 609,000 | 597,000 | 2,000 | -198,000 | -229,000 | -288,000 | 203,000 | 374,000 | 356,000 | 343,000 |
| Long-term debt | US$ in thousands | 3,984,000 | 4,004,000 | 3,964,000 | 3,988,000 | 3,986,000 | 3,946,000 | 3,732,000 | 3,785,000 | 3,829,000 | 3,846,000 | 3,346,000 | 3,367,000 | 3,354,000 | 3,387,000 | 3,104,000 | 3,000,000 | 2,983,000 | 2,988,000 | 2,974,000 | 3,006,000 |
| Total stockholders’ equity | US$ in thousands | 433,000 | 463,000 | 307,000 | 281,000 | 252,000 | 270,000 | 152,000 | 156,000 | 154,000 | 153,000 | 31,000 | 81,000 | 57,000 | 16,000 | -63,000 | -38,000 | -306,000 | -190,000 | -289,000 | -152,000 |
| Return on total capital | 19.79% | 19.68% | 18.50% | 17.36% | 16.47% | 17.55% | 18.38% | 16.52% | 16.75% | 16.30% | 18.03% | 17.31% | 0.06% | -5.82% | -7.53% | -9.72% | 7.58% | 13.37% | 13.26% | 12.02% |
March 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $874,000K ÷ ($3,984,000K + $433,000K)
= 19.79%
Warner Music Group has shown a generally improving trend in its return on total capital over the past several quarters. The return on total capital increased from 12.02% in June 2019 to 19.79% in March 2024, indicating strong operational efficiency and effective allocation of capital over this period.
Despite some fluctuations in between, such as the temporary negative returns in early 2021, Warner Music Group has been able to consistently generate a return on total capital above 15% since December 2020. This indicates the company's ability to generate profits relative to the total capital employed in its operations.
The upward trend in return on total capital suggests that Warner Music Group has been able to generate increasing profitability and efficiency in its operations, which is a positive indicator for investors and stakeholders. It also demonstrates the company's ability to effectively manage its capital structure and utilize its resources to drive returns for shareholders.
Peer comparison
Mar 31, 2024