Brady Corporation (BRC)

Return on total capital

Jul 31, 2025 Apr 30, 2025 Jan 31, 2025 Oct 31, 2024 Jul 31, 2024 Apr 30, 2024 Jan 31, 2024 Oct 31, 2023 Jul 31, 2023 Apr 30, 2023 Jan 31, 2023 Oct 31, 2022 Jul 31, 2022 Apr 30, 2022 Jan 31, 2022 Oct 31, 2021 Jul 31, 2021 Apr 30, 2021 Jan 31, 2021 Oct 31, 2020
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 241,844 249,246 247,704 250,955 250,967 246,388 245,035 238,174 229,235 219,267 207,062 199,607 193,256 180,516 176,841 173,995 171,460 164,743 139,618 143,174
Long-term debt US$ in thousands
Total stockholders’ equity US$ in thousands 1,192,210 1,167,550 1,120,470 1,108,930 1,066,660 1,022,100 1,038,730 994,992 990,919 995,096 967,404 911,725 911,298 914,238 966,568 963,893 963,028 951,626 919,335 880,401
Return on total capital 20.29% 21.35% 22.11% 22.63% 23.53% 24.11% 23.59% 23.94% 23.13% 22.03% 21.40% 21.89% 21.21% 19.74% 18.30% 18.05% 17.80% 17.31% 15.19% 16.26%

July 31, 2025 calculation

Return on total capital = EBIT (ttm) ÷ (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 specified period reveals a generally upward trend from October 31, 2020, to October 31, 2023. The ROTC increased from 16.26% in October 2020 to a peak of 23.94% in October 2023, indicating an improvement in the company's efficiency in generating earnings relative to its total capital base. This growth trajectory suggests successful operational and strategic initiatives that enhanced profitability and capital utilization during this timeframe.

Following the peak in October 2023, there appears to be a slight decline in the ROTC, registering at 23.59% in January 2024, and marginal decreases subsequently to 23.53% in July 2024 and 22.63% in October 2024. This minor reduction may reflect short-term factors such as market fluctuations, investment cycles, or temporary operational challenges.

Looking further into the projections extending to April 2025 and July 2025, the ROTC is anticipated to continue decreasing, reaching approximately 21.35% and 20.29%, respectively. These downward trends could signify planned strategic adjustments, reallocations of capital, or anticipated economic pressures that might influence profitability levels relative to total capital.

Overall, the period indicates a peak profitability efficiency around late 2023, followed by a gradual normalization or reduction in return rates. This pattern necessitates ongoing monitoring to assess whether the downward trend stabilizes or persists, informing perspectives on Brady Corporation’s future capital effectiveness and profitability management strategies.