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.