FedEx Corporation (FDX)
Return on total capital
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 5,441,000 | 6,581,000 | 6,427,000 | 5,797,000 | 7,956,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 28,074,000 | 27,582,000 | 26,088,000 | 24,939,000 | 24,168,000 |
| Return on total capital | 19.38% | 23.86% | 24.64% | 23.24% | 32.92% |
May 31, 2025 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $5,441,000K ÷ ($—K + $28,074,000K)
= 19.38%
The analysis of FedEx Corporation's return on total capital over the specified period reveals notable fluctuations and a generally declining trend. As of May 31, 2021, the return on total capital stood at 32.92%, indicating a strong ability to generate operating income relative to the total capital employed. By May 31, 2022, this metric declined substantially to 23.24%, representing a decrease of approximately 9.68 percentage points. The subsequent year, May 31, 2023, saw a modest increase to 24.64%, reflecting a partial recovery in the company's efficiency in utilizing total capital to generate returns. However, this upward movement was short-lived, as the figure decreased again to 23.86% by May 31, 2024, indicating a stabilization but not a recovery to previous higher levels. Looking further ahead, the return on total capital for May 31, 2025, diminished to 19.38%, marking a significant decline from the peak levels observed in 2021.
Overall, the trend suggests that FedEx's ability to generate returns from its total capital has weakened over the analyzed period. The initial high in 2021 was followed by a steep decline in 2022, with some minor fluctuations thereafter. The most recent data points to a continued downward trajectory, which may reflect increasing challenges in operational efficiency, changes in capital management, or external factors affecting profitability. The pattern underscores a need for strategic review to address the factors contributing to the sustained decline in return on total capital.