Flex Ltd (FLEX)
Return on total capital
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,007,000 | 1,184,000 | 972,000 | 795,000 | 166,200 |
| Long-term debt | US$ in thousands | 3,261,000 | 3,544,000 | 3,248,000 | 3,515,000 | 2,689,000 |
| Total stockholders’ equity | US$ in thousands | 5,325,000 | 5,351,000 | 4,129,000 | 3,436,000 | 2,831,000 |
| Return on total capital | 11.73% | 13.31% | 13.18% | 11.44% | 3.01% |
March 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,007,000K ÷ ($3,261,000K + $5,325,000K)
= 11.73%
Flex Ltd's return on total capital has shown a fluctuating trend over the past five years. In the most recent fiscal year ending March 31, 2024, the return on total capital stood at 11.73%, lower than the previous year's figure of 13.31%. Despite the decrease, the return remains relatively healthy, indicating that the company is utilizing its total capital efficiently to generate profits.
Looking further back, Flex Ltd's return on total capital has generally been in double digits, with the highest being 13.31% in the fiscal year ending March 31, 2023. This suggests that the company has been effectively deploying its capital resources to generate returns for its investors.
The significant improvement from the fiscal year ending March 31, 2020, where the return on total capital was only 3.01%, to the current levels indicates a positive shift in the company's performance and capital efficiency.
Overall, Flex Ltd's return on total capital reflects a reasonable level of profitability and efficiency in utilizing its total capital effectively to generate returns for its shareholders. However, the slight decrease in the most recent year warrants close monitoring to ensure sustained performance in the future.
Peer comparison
Mar 31, 2024