Warner Music Group (WMG)
Return on total capital
| Sep 30, 2024 | Jun 30, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 823,000 | 892,000 | 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 |
| Long-term debt | US$ in thousands | 4,014,000 | 3,978,000 | 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 |
| Total stockholders’ equity | US$ in thousands | 518,000 | 483,000 | 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 |
| Return on total capital | 18.16% | 20.00% | 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% |
September 30, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $823,000K ÷ ($4,014,000K + $518,000K)
= 18.16%
Warner Music Group's return on total capital has shown fluctuations over the past few quarters. The return on total capital was positive and relatively stable from September 2020 to June 2023, ranging from 16.47% to 20.00%. However, there was a noticeable decline in the return on total capital in the first quarter of 2021, where it dropped to 0.06%, and further decreased to -5.82% in the second quarter of 2021, indicating potential challenges during that period.
Projections improved in December 2021 with a return on total capital of 16.30%, followed by a steady increase reaching a peak of 20.00% in the second quarter of 2024. This upward trend suggests an improvement in the company's ability to generate profits relative to the total capital employed.
Overall, Warner Music Group's return on total capital has demonstrated resilience, with periods of growth and recovery following temporary setbacks. The recent performance indicates a positive trend in effectively utilizing total capital to generate returns for shareholders.
Peer comparison
Sep 30, 2024