American Woodmark Corporation (AMWD)
Return on total capital
| Apr 30, 2025 | Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 144,848 | 160,175 | 134,880 | -32,790 | 103,821 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 915,998 | 910,376 | 873,788 | 772,883 | 742,896 |
| Return on total capital | 15.81% | 17.59% | 15.44% | -4.24% | 13.98% |
April 30, 2025 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $144,848K ÷ ($—K + $915,998K)
= 15.81%
The analysis of American Woodmark Corporation's return on total capital over the period from April 30, 2021, to April 30, 2025, reveals notable fluctuations that reflect the company's evolving financial performance and efficiency in utilizing its capital base.
In April 2021, the return on total capital was 13.98%, indicating a relatively strong capacity to generate earnings from the entirety of its capital investments. This level suggests effective use of both debt and equity during that period.
By April 30, 2022, the return had declined sharply to -4.24%, transitioning into negative territory. This downturn signifies a significant deterioration in profitability relative to the capital employed, potentially attributable to adverse market conditions, increased costs, or disruptions impacting operational efficiency.
Following this, a substantial rebound is observed by April 30, 2023, with the return increasing to 15.44%. This recovery points to improved operational performance, effective cost management, or favorable market developments that restored profitability levels to above the earlier peak.
The trend continues with an upward movement to 17.59% by April 30, 2024, representing the highest level in this period. This indicates robust utilization of capital and strong earnings generation, potentially supported by strategic initiatives or market expansion.
However, by April 30, 2025, the return slightly declines to 15.81%. While still maintaining a commendable level, this decrease suggests a slight moderation in efficiency or profitability, possibly due to increased competition, market saturation, or capital redeployments.
Overall, the company's return on total capital demonstrates significant volatility over the analyzed period, with periods of recovery following downturns. The data implies that American Woodmark has experienced fluctuations in its ability to efficiently turn its total capital investment into earnings, but recent figures indicate a generally positive trend with sustainable profitability levels.