Donaldson Company Inc (DCI)
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 | 516,400 | 556,700 | 487,900 | 453,300 | 394,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,453,500 | 1,489,100 | 1,320,700 | 1,133,200 | 1,137,100 |
| Return on total capital | 35.53% | 37.38% | 36.94% | 40.00% | 34.65% |
July 31, 2025 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $516,400K ÷ ($—K + $1,453,500K)
= 35.53%
The analysis of Donaldson Company Inc.'s return on total capital over the period from July 31, 2021, to July 31, 2025, reveals variability in the company's efficiency in generating returns from its overall capital base.
As of July 31, 2021, the company's return on total capital stood at 34.65%, indicating a robust level of performance relative to its invested capital. This figure increased significantly in the subsequent year, reaching 40.00% on July 31, 2022, which suggests an improvement in operational efficiency or capital utilization during this period.
However, this positive trend did not sustain into the following year. By July 31, 2023, the return declined to 36.94%, reflecting a slight decrease in capital efficiency. Despite this reduction, the return remained relatively high, indicating that the company continued to generate substantial profits relative to its total capital employed.
In the period ending July 31, 2024, the return on total capital saw a marginal increase to 37.38%. This suggests a modest recovery or stabilization in the company's ability to produce returns from its capital base following the previous dip.
Finally, by July 31, 2025, the return decreased slightly again to 35.53%. This downward shift indicates a slight erosion in capital efficiency or profitability, although the return remains well above the initial level observed in 2021.
Overall, the data demonstrate that Donaldson Company Inc. has maintained a relatively high return on total capital throughout the analyzed period, with fluctuations that could be attributable to changes in operational performance, investment decisions, or market conditions. The cyclical movement suggests a resilient core profitability, albeit with periods of temporary decline, emphasizing the importance of continuous operational improvement and strategic capital management.