Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. CarMax's annualized net income for the quarter that ended in May. 2023 was $913 Mil. CarMax's average shareholder tangible equity for the quarter that ended in May. 2023 was $5,577 Mil. Therefore, CarMax's annualized Return-on-Tangible-Equity for the quarter that ended in May. 2023 was 16.37%.
The historical rank and industry rank for CarMax's Return-on-Tangible-Equity or its related term are showing as below:
KMX'
s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: 8.52 Med: 20.62 Max: 25.25
Current: 8.52
During the past 13 years, CarMax's highest Return-on-Tangible-Equity was 25.25%. The lowest was 8.52%. And the median was 20.62%.
KMX's Return-on-Tangible-Equity is ranked better than 52.83% of 1236
companies
in the Vehicles & Parts industry
Industry Median: 7.75
vs KMX: 8.52
CarMax Return-on-Tangible-Equity Historical Data
The historical data trend for CarMax's Return-on-Tangible-Equity can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
* Premium members only.
CarMax Annual Data
Trend
Feb14
Feb15
Feb16
Feb17
Feb18
Feb19
Feb20
Feb21
Feb22
Feb23
Return-on-Tangible-Equity
25.25
24.94
18.37
24.35
9.18
CarMax Quarterly Data
Aug18
Nov18
Feb19
May19
Aug19
Nov19
Feb20
May20
Aug20
Nov20
Feb21
May21
Aug21
Nov21
Feb22
May22
Aug22
Nov22
Feb23
May23
Return-on-Tangible-Equity
19.49
9.56
2.83
5.10
16.37
Competitive Comparison
For the Auto & Truck Dealerships subindustry, CarMax's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
CarMax Return-on-Tangible-Equity Distribution
For the Vehicles & Parts industry and Consumer Cyclical sector, CarMax's Return-on-Tangible-Equity distribution charts can be found below:
* The bar in red indicates where CarMax's Return-on-Tangible-Equity falls in comparison to its industry or sector. The grey bar indicates the Return-on-Tangible-Equity's extreme value range as defined by GuruFocus.
CarMax Return-on-Tangible-Equity Calculation
CarMax's annualized Return-on-Tangible-Equity for the fiscal year that ended in Feb. 2023 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
In the calculation of annual Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (May. 2023) net income data.
Return-on-Tangible-Equity is displayed in the 10-year financial page.
Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.
Be Aware
Net Income is used.
Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their Return-on-Tangible-Equitys can be extremely high.
CarMax Return-on-Tangible-Equity Related Terms
Thank you for viewing the detailed overview of CarMax's Return-on-Tangible-Equity provided by GuruFocus.com. Please click on the following links to see related term pages.
CarMax sells, finances, and services used and new cars through a chain of about 240 used retail stores. It was formed in 1993 as a unit of Circuit City and spun off into an independent company in late 2002. Used-vehicle sales typically account for about 83% of revenue (78% in fiscal 2023 due to the chip shortage) and wholesale about 13% (20% in fiscal 2023), with the remaining portion composed of extended service plans and repair. In fiscal 2023, the company retailed and wholesaled 807,823, and 585,071 used vehicles, respectively. CarMax is the largest used-vehicle retailer in the U.S. but still estimates that it has only about 4% U.S. market share of vehicles 0-10 years old in 2022. It seeks over 5% share by the end of calendar 2025. CarMax is based in Richmond, Virginia.
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