Acuity Brands Inc (AYI)
Return on total capital
| Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 553,300 | 474,600 | 520,900 | 420,400 | 351,100 |
| Long-term debt | US$ in thousands | 496,200 | 495,600 | 495,000 | 494,300 | 376,800 |
| Total stockholders’ equity | US$ in thousands | 2,378,800 | 2,015,400 | 1,911,800 | 2,044,500 | 2,127,500 |
| Return on total capital | 19.25% | 18.90% | 21.64% | 16.56% | 14.02% |
August 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $553,300K ÷ ($496,200K + $2,378,800K)
= 19.25%
Acuity Brands Inc's return on total capital has shown a positive trend over the past five years. The company's return on total capital has increased from 14.02% in 2020 to 19.25% in 2024, indicating a consistent improvement in the efficiency of utilizing both equity and debt in generating profits. This demonstrates the company's ability to generate a higher return relative to the total capital employed in its operations.
The return on total capital peaked in 2022 at 21.64%, reflecting a strong performance in effectively utilizing its capital resources to generate profitability. Despite a slight decrease in 2023 and then a subsequent increase in 2024, the overall trend indicates a healthy performance in terms of capital efficiency.
Overall, the increasing trend in Acuity Brands Inc's return on total capital suggests efficient management of capital and a potential indication of effective strategic decision-making, which could contribute to the company's long-term financial success.
Peer comparison
Aug 31, 2024