Commercial Metals Company (CMC)

Return on total capital

		Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	930,363	1,047,001	1,162,094	1,268,778	1,368,282	1,644,604	1,565,856	1,417,421	1,179,517	759,079	586,228	481,892	405,291	406,503	433,816	454,375	476,436	424,391	339,147	292,404
Long-term debt	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	4,222,450	4,229,740	4,120,870	4,023,380	3,782,960	3,584,000	3,286,200	3,141,940	2,869,720	2,485,960	2,294,880	2,156,370	2,009,260	1,934,690	1,889,200	1,800,450	1,757,840	1,701,500	1,623,860	1,564,000
Return on total capital		22.03%	24.75%	28.20%	31.54%	36.17%	45.89%	47.65%	45.11%	41.10%	30.53%	25.55%	22.35%	20.17%	21.01%	22.96%	25.24%	27.10%	24.94%	20.89%	18.70%

February 29, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $930,363K ÷ ($—K + $4,222,450K)
= 22.03%

Commercial Metals Company has shown a fluctuating trend in its return on total capital over the past few periods. The return on total capital ranged from a low of 18.70% in November 2019 to a high of 47.65% in August 2022. The latest return on total capital as of February 2024 is 22.03%.

The return on total capital measures the efficiency of the company in generating profits from its total invested capital. A higher return on total capital indicates that the company is effectively utilizing its resources to generate profits. The decreasing trend in return on total capital from 47.65% in August 2022 to 22.03% in February 2024 may suggest a potential decline in the company's ability to generate profits relative to its invested capital.

It would be advisable to further analyze the factors impacting the return on total capital to understand the underlying reasons for the fluctuations and take appropriate measures to enhance profitability and capital efficiency.