Deere & Company (DE)
Return on total capital
| Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Nov 1, 2020 | Nov 3, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 15,490,000 | 10,200,000 | 8,614,000 | 5,080,000 | 5,571,000 |
| Long-term debt | US$ in thousands | — | — | 32,888,000 | 32,734,000 | — |
| Total stockholders’ equity | US$ in thousands | 21,785,000 | 20,262,000 | 18,431,000 | 12,937,000 | 11,413,000 |
| Return on total capital | 71.10% | 50.34% | 16.79% | 11.12% | 48.81% |
October 29, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $15,490,000K ÷ ($—K + $21,785,000K)
= 71.10%
To analyze Deere & Co.'s return on total capital over the past five years, we can see a positive trend in the return on total capital. The return on total capital has increased from 7.69% in 2019 to 15.28% in 2023, indicating the company's ability to generate higher returns relative to its total capital employed. This suggests that Deere & Co. has been effectively utilizing its capital to generate profits for its shareholders and stakeholders.
The consistent increase in return on total capital reflects the company's efficient management of its assets and capital structure, resulting in improved profitability. This trend is generally favorable for investors and indicates the company's ability to generate higher returns on the capital invested in its operations.
Overall, the positive trend in return on total capital for Deere & Co. demonstrates the company's operational efficiency and effectiveness in utilizing its capital to generate profits. However, it's important to consider other financial metrics and qualitative factors to gain a comprehensive understanding of the company's overall financial performance.
Peer comparison
Oct 29, 2023