Dollar General Corporation (DG)

Return on total capital

		Feb 2, 2024	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	2,446,300	3,327,890	3,220,680	3,554,760	2,302,300
Long-term debt	US$ in thousands	—	—	4,172,070	—	2,911,440
Total stockholders’ equity	US$ in thousands	6,749,120	5,541,770	6,261,990	6,661,240	6,702,500
Return on total capital		36.25%	60.05%	30.87%	53.36%	23.95%

February 2, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $2,446,300K ÷ ($—K + $6,749,120K)
= 36.25%

The return on total capital for Dollar General Corporation has fluctuated over the past five years. In 2024, the return on total capital was 36.25%, representing a decrease from the previous year where it stood at 60.05%. This decline indicates that the company may not be utilizing its total capital as efficiently in generating profits compared to the prior period.

Comparing the 2024 return on total capital to that of 2020, which was 23.95%, we see an improvement in performance. This suggests that Dollar General has been able to enhance its profitability relative to the total capital employed over the four-year period.

However, it is worth noting that the 2024 return on total capital is still lower than the 2023 figure of 60.05%, indicating a potential performance slowdown during the period. Further analysis and investigation into the company's financial management and operational strategies may be required to understand the reasons behind this fluctuation in return on total capital.