Dollar General Corporation (DG)
Return on total capital
| Jan 31, 2025 | Feb 2, 2024 | Jan 31, 2024 | Feb 3, 2023 | Jan 31, 2023 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,714,070 | 2,446,300 | 2,446,300 | 3,327,890 | 3,327,890 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 7,413,710 | 6,749,120 | 6,749,120 | 5,541,770 | 5,541,770 |
| Return on total capital | 23.12% | 36.25% | 36.25% | 60.05% | 60.05% |
January 31, 2025 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,714,070K ÷ ($—K + $7,413,710K)
= 23.12%
Based on the provided data, Dollar General Corporation's return on total capital has shown a downward trend over the years. In January 2023 and February 2023, the return on total capital was 60.05%, possibly indicating strong performance and efficient capital utilization. However, by January 2024 and February 2024, the return on total capital declined to 36.25%, signifying a decrease in efficiency in generating returns from the total capital employed.
The most recent data point from January 2025 shows a further decrease in the return on total capital to 23.12%, suggesting ongoing challenges in maximizing the returns from the company's total capital. This decline may raise concerns about Dollar General Corporation's ability to generate adequate returns relative to the capital invested, potentially impacting the overall financial performance and shareholder value of the company.
It is essential for Dollar General Corporation to critically assess and address the factors contributing to the declining trend in return on total capital to enhance efficiency, profitability, and sustainable growth in the future.
Peer comparison
Jan 31, 2025