AAR Corp (AIR)
Return on total capital
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | — | 101,500 | 133,400 | 111,100 | 36,800 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,211,600 | 1,189,800 | 1,099,100 | 1,034,500 | 974,400 |
| Return on total capital | 0.00% | 8.53% | 12.14% | 10.74% | 3.78% |
May 31, 2025 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $—K ÷ ($—K + $1,211,600K)
= 0.00%
The analysis of AAR Corp's return on total capital (ROTC) over the period from May 31, 2021, to May 31, 2025, reveals notable fluctuations and trends. In the fiscal year ending May 31, 2021, the ROTC was recorded at 3.78%, indicating a relatively modest level of profitability relative to the company's total capital base during that period.
This figure increased significantly in the subsequent year, reaching 10.74% as of May 31, 2022. The rise suggests improved operational efficiency or higher returns on the company's invested capital, reflecting a more effective utilization of its resources. The upward trend continued into May 31, 2023, with the ROTC reaching 12.14%, which signifies further enhancement in capital productivity and profitability margins during that period.
However, a decline in return is observed in the fiscal year ending May 31, 2024, where the ROTC decreased to 8.53%. This reduction indicates a potential diminishment in profitability or increased capital deployment that did not proportionally generate equivalent earnings. It could reflect operational challenges, market conditions, or strategic changes impacting income generation relative to total capital employed.
The data point for May 31, 2025, shows a return of 0.00%, which may imply that the company either incurred significant losses, restructured, or that the data reflects a period where profitable operations were absent or negligible relative to the capital base. This substantial decline underscores a possible downturn or extraordinary circumstances affecting AAR Corp's profitability performance, warranting further investigation into specific operational or strategic factors for that fiscal year.
Overall, the trend indicates initial growth in the company's efficiency and profitability from 2021 through 2023, followed by a decline in 2024 and a significant drop to zero in 2025. The fluctuations underscore the importance of examining underlying operational, market, or strategic events to fully comprehend the causes behind the variability in AAR Corp's return on total capital over this period.
Peer comparison
May 31, 2025