The Gap, Inc. (GAP)
Return on total capital
| Feb 1, 2025 | Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,224,000 | 646,000 | -51,000 | 490,000 | -910,000 |
| Long-term debt | US$ in thousands | 1,490,000 | 1,488,000 | 1,486,000 | 1,484,000 | 2,216,000 |
| Total stockholders’ equity | US$ in thousands | 3,264,000 | 2,595,000 | 2,233,000 | 2,722,000 | 2,614,000 |
| Return on total capital | 25.75% | 15.82% | -1.37% | 11.65% | -18.84% |
February 1, 2025 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,224,000K ÷ ($1,490,000K + $3,264,000K)
= 25.75%
Based on the data provided, The Gap, Inc.'s return on total capital has shown significant fluctuations over the past five years. In January 2021, the company experienced a negative return of -18.84%, indicating that its capital utilization was inefficient and led to a loss on invested capital.
However, by January 2022, The Gap, Inc. was able to improve its return on total capital to 11.65%, showing a positive turnaround in its capital efficiency. The company's performance further fluctuated in January 2023 with a return of -1.37%, indicating a slight decline in capital utilization efficiency.
In February 2024, The Gap, Inc. experienced a notable improvement with a return on total capital of 15.82%, suggesting better utilization of its capital resources. The positive trend continued into February 2025, with the company achieving a return on total capital of 25.75%, signifying strong capital efficiency and profitability.
Overall, The Gap, Inc.'s return on total capital has shown variability, but the recent positive trend indicates improved capital utilization and profitability, which could be a positive signal for investors and stakeholders.
Peer comparison
Feb 1, 2025