Best Buy Co. Inc (BBY)
Return on total capital
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,674,000 | 1,824,000 | 3,053,000 | 2,429,000 | 2,057,000 |
| Long-term debt | US$ in thousands | 1,152,000 | 1,160,000 | 1,216,000 | 1,253,000 | 1,257,000 |
| Total stockholders’ equity | US$ in thousands | 3,053,000 | 2,795,000 | 3,020,000 | 4,587,000 | 3,479,000 |
| Return on total capital | 39.81% | 46.12% | 72.07% | 41.59% | 43.43% |
February 3, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,674,000K ÷ ($1,152,000K + $3,053,000K)
= 39.81%
Best Buy Co. Inc's return on total capital has fluctuated over the past five years. The trend shows a decrease in the return on total capital from 72.07% in January 2022 to 39.81% in February 2024. This indicates a decline in the company's efficiency in generating returns from its total capital employed.
It is important to note that the return on total capital in January 2022 was the highest over the period considered, suggesting that Best Buy Co. Inc was particularly effective in utilizing its total capital to generate profits during that fiscal year. However, the subsequent decreases in return on total capital in the following years may signify challenges or changes in the company's operations or financial performance.
Overall, Best Buy Co. Inc's return on total capital has shown variability, and further analysis of the company's financial statements and operational strategies may be required to understand the factors contributing to these fluctuations.