FedEx Corporation (FDX)
Return on total capital
| May 31, 2025 | Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 6,280,000 | 6,532,000 | 6,458,000 | 6,542,000 | 6,963,000 | 7,005,000 | 6,875,000 | 6,726,000 | 6,427,000 | 4,998,000 | 5,375,000 | 5,656,000 | 6,007,000 | 8,252,000 | 7,825,000 | 7,696,000 | 7,806,000 | 4,691,000 | 3,885,000 | 3,208,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 95,178,000 | 26,708,000 | 26,460,000 | 27,176,000 | 27,582,000 | 26,375,000 | 26,766,000 | 26,534,000 | 26,088,000 | 24,733,000 | 24,115,000 | 25,140,000 | 24,939,000 | 24,526,000 | 24,940,000 | 24,321,000 | 24,168,000 | 21,981,000 | 21,039,000 | 19,462,000 |
| Return on total capital | 6.60% | 24.46% | 24.41% | 24.07% | 25.24% | 26.56% | 25.69% | 25.35% | 24.64% | 20.21% | 22.29% | 22.50% | 24.09% | 33.65% | 31.38% | 31.64% | 32.30% | 21.34% | 18.47% | 16.48% |
May 31, 2025 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $6,280,000K ÷ ($—K + $95,178,000K)
= 6.60%
The analysis of FedEx Corporation's return on total capital over the period from August 2020 through May 2025 reveals notable fluctuations and trends. Initially, the company experienced a growth phase, with the return rising from 16.48% in August 2020 to a peak of 33.65% in February 2022. This indicates an improving efficiency in utilizing total capital to generate operating returns during this period, possibly driven by operational optimization, market expansion, or strategic investments.
Following the peak in early 2022, a declining trend is observed, with the return decreasing to approximately 20.21% by February 2023. This downward movement may reflect increased capital costs, operational challenges, or external economic factors affecting profitability. However, from the low point in February 2023, a gradual recovery occurs, with the return rising again to approximately 25.69% by November 2023 and reaching 26.56% in February 2024. This suggests a reinstatement of operational efficiency or improved profit margins.
Toward the most recent period, the return stabilizes around the mid-24% range through May 2024 and November 2024, maintaining a relatively steady level before experiencing a slight decline to 24.46% in February 2025. The most recent data indicates an anomalous and significant drop to 6.60% in May 2025, which diverges markedly from previous figures and may imply a substantial change in capital structure, asset impairments, or extraordinary expenses affecting overall profitability.
Overall, the company's return on total capital has demonstrated periods of growth, peak profitability, subsequent decline, and partial recovery. The recent sharp decline signifies potential challenges or strategic adjustments that impact the capital efficiency, warranting further investigation into underlying causes such as asset valuation, operational performance, or macroeconomic influences.