Watsco Inc (WSO)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 751,274 | 794,810 | 831,578 | 628,528 | 401,034 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 2,656,990 | 2,229,840 | 1,889,240 | 1,664,950 | 1,486,680 |
| Return on total capital | 28.28% | 35.64% | 44.02% | 37.75% | 26.98% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $751,274K ÷ ($—K + $2,656,990K)
= 28.28%
Watsco Inc's return on total capital has shown a positive trend over the years, increasing from 26.98% as of December 31, 2020, to a peak of 44.02% as of December 31, 2022. This indicates that the company has been effectively utilizing its total capital to generate returns for its shareholders and stakeholders. However, the return on total capital decreased slightly to 28.28% as of December 31, 2024. Overall, the company has maintained a strong performance in terms of generating returns on its total capital, although the slight decline in 2024 may warrant further investigation to ensure sustainable profitability.