ZoomInfo Technologies Inc (ZI)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 434,000 | 242,200 | 166,800 | 70,000 |
| Long-term debt | US$ in thousands | 1,226,400 | 1,235,700 | 1,232,900 | 744,900 |
| Total stockholders’ equity | US$ in thousands | 2,119,300 | 2,271,800 | 1,997,900 | 939,600 |
| Return on total capital | 12.97% | 6.91% | 5.16% | 4.16% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $434,000K ÷ ($1,226,400K + $2,119,300K)
= 12.97%
ZoomInfo Technologies Inc.'s return on total capital has shown a positive trend over the past five years. The return on total capital increased from 4.24% in 2019 to 8.05% in 2023. This indicates that the company has been able to generate more returns relative to the total capital employed.
The average return on total capital for the period from 2019 to 2023 is approximately 5.95%. This implies that, on average, ZoomInfo Technologies Inc. has been able to generate a return of 5.95% for every dollar of total capital invested in the business over the five-year period.
The increasing trend in return on total capital indicates improvement in the company's efficiency in generating profits from its total capital base. This could be attributed to various factors such as effective capital allocation, operational efficiency, and profitability of the business.
However, it is essential to further analyze the components contributing to the return on total capital to understand the drivers behind this trend and assess the sustainability of the company's performance in generating returns for its capital providers.
Peer comparison
Dec 31, 2023