The Cooper Companies Inc. (COO)
Return on total capital
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 518,200 | 532,600 | 514,600 | 303,300 | 545,400 |
| Long-term debt | US$ in thousands | 2,520,400 | 2,347,100 | 1,396,100 | 1,383,900 | 1,262,600 |
| Total stockholders’ equity | US$ in thousands | 7,550,800 | 7,174,500 | 6,941,800 | 3,824,600 | 3,628,400 |
| Return on total capital | 5.15% | 5.59% | 6.17% | 5.82% | 11.15% |
October 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $518,200K ÷ ($2,520,400K + $7,550,800K)
= 5.15%
The return on total capital measures the efficiency of a company in generating profits from the total capital employed, including both equity and debt. Analyzing the return on total capital for Cooper Companies, Inc. over the past five years provides insights into the company's ability to generate returns for its capital providers.
In 2023, the return on total capital for Cooper Companies, Inc. stood at 5.27%, a slight increase from the previous year's 5.11%. This indicates that the company was able to generate more profit relative to its total capital compared to the prior year. However, the return on total capital was lower than the levels seen in 2021 and 2019, suggesting a potential decline in efficiency in utilizing capital.
Looking at the trend over the past five years, there was a notable decrease in the return on total capital from 2019 to 2020, which may raise concerns about the company's capital efficiency during that period. Although there was a slight improvement in 2021, the return on total capital has not fully recovered to the 2019 levels.
Overall, the return on total capital for Cooper Companies, Inc. has displayed some variability, with a general downward trend from 2019 to 2023. This indicates that the company may need to focus on improving its capital utilization efficiency to enhance returns for its capital providers and ultimately create sustainable long-term value.
Peer comparison
Oct 31, 2023