Brady Corporation (BRC)
Return on total capital
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 241,844 | 250,967 | 229,235 | 193,256 | 171,460 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,192,210 | 1,066,660 | 990,919 | 911,298 | 963,028 |
| Return on total capital | 20.29% | 23.53% | 23.13% | 21.21% | 17.80% |
July 31, 2025 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $241,844K ÷ ($—K + $1,192,210K)
= 20.29%
The analysis of Brady Corporation’s return on total capital (ROTC) over the period from July 31, 2021, to July 31, 2025, indicates a general upward trend with some fluctuations. Specifically, the ROTC increased from 17.80% in 2021 to 21.21% in 2022, reflecting improved efficiency in utilizing total capital to generate earnings. This upward movement continued through 2023, reaching 23.13%, which represents a notable increase and suggests enhanced profitability and operational performance. The positive trend persisted into 2024, with the ROTC marginally rising to 23.53%, indicating sustained strength in the company’s capital utilization and profitability metrics.
However, in 2025, a decline is observed, with the ROTC decreasing to 20.29%. This downward shift could be indicative of various factors, such as changes in earnings, capital structure, or operational challenges affecting overall profitability relative to total capital. Despite this dip, the ROTC in 2025 remains higher than the 2021 level, reflecting overall improvement across the analysed period, albeit with recent signs of potential pressure on returns.
Overall, the period demonstrates Brady Corporation’s capacity to improve the efficiency of its capital deployment over several years, with the recent decline warranting further examination into the underlying causes to assess ongoing performance sustainability.