XPO Logistics Inc (XPO)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 425,000 | 875,000 | 558,000 | 364,000 | 747,000 |
| Long-term debt | US$ in thousands | 3,335,000 | 2,473,000 | 3,513,000 | 5,240,000 | 5,182,000 |
| Total stockholders’ equity | US$ in thousands | 1,266,000 | 1,012,000 | 1,138,000 | 2,709,000 | 2,743,000 |
| Return on total capital | 9.24% | 25.11% | 12.00% | 4.58% | 9.43% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $425,000K ÷ ($3,335,000K + $1,266,000K)
= 9.24%
XPO Inc's return on total capital has shown fluctuations over the past five years. In 2023, the return on total capital was 11.63%, a decrease from the previous year's 15.49%. This decline may indicate challenges in efficiently utilizing the company's total capital to generate profits. However, compared to 2020 and 2019, the return on total capital in 2023 is still relatively higher, suggesting some improvement in capital efficiency.
It is worth noting that XPO Inc's return on total capital was notably low in 2020 at 4.15%, which may have been influenced by economic uncertainties or specific challenges faced by the company during that period. The subsequent years, 2021 and 2022, saw a more favorable performance with returns of 14.27% and 15.49%, respectively, indicating improved capital utilization efficiency during those years.
Overall, XPO Inc's return on total capital has varied over the past five years, with fluctuations reflecting changes in the company's ability to generate profits relative to its total capital employed. Further analysis and consideration of the company's specific financial and operational factors are necessary to fully understand the drivers behind these fluctuations and to assess the sustainability of XPO Inc's capital efficiency.
Peer comparison
Dec 31, 2023