Dollar Tree Inc (DLTR)
Return on total capital
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -881,800 | 2,236,300 | 1,811,400 | 1,887,900 | 1,262,200 |
| Long-term debt | US$ in thousands | 3,426,300 | 3,421,600 | 3,417,000 | 3,226,200 | 3,522,200 |
| Total stockholders’ equity | US$ in thousands | 7,313,100 | 8,751,500 | 7,718,500 | 7,285,300 | 6,254,800 |
| Return on total capital | -8.21% | 18.37% | 16.27% | 17.96% | 12.91% |
February 3, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-881,800K ÷ ($3,426,300K + $7,313,100K)
= -8.21%
Dollar Tree Inc's return on total capital has fluctuated over the past five years. In the most recent fiscal year as of February 3, 2024, the company reported a negative return on total capital of -8.21%, indicating that it did not generate adequate returns from the capital invested in the business. This decline is a significant departure from the positive returns seen in the three prior years, where the company's return on total capital ranged from 12.91% to 18.37%.
The negative return on total capital in 2024 suggests that Dollar Tree Inc may be facing challenges in efficiently utilizing its capital to generate profits. It is important for the company to address the underlying reasons behind this decline and take strategic measures to improve its capital efficiency in order to enhance overall financial performance and create value for its shareholders.
Peer comparison
Feb 3, 2024