The Gap, Inc. (GAP)
Return on total capital
| Aug 3, 2024 | May 4, 2024 | Feb 3, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Feb 1, 2020 | Nov 2, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,069,000 | 872,000 | 646,000 | 386,000 | 298,000 | 148,000 | -51,000 | -23,000 | -384,000 | 53,000 | 490,000 | 617,000 | 964,000 | 571,000 | -910,000 | -1,283,000 | -1,231,000 | -958,000 | 604,000 | 1,224,000 |
| Long-term debt | US$ in thousands | 1,489,000 | 1,489,000 | 1,488,000 | 1,488,000 | 1,487,000 | 1,487,000 | 1,486,000 | 1,486,000 | 1,485,000 | 1,485,000 | 1,484,000 | 1,484,000 | 2,220,000 | 2,218,000 | 2,216,000 | 2,214,000 | 2,212,000 | 1,250,000 | 1,249,000 | 1,249,000 |
| Total stockholders’ equity | US$ in thousands | 2,901,000 | 2,707,000 | 2,595,000 | 2,460,000 | 2,263,000 | 2,185,000 | 2,233,000 | 2,571,000 | 2,305,000 | 2,454,000 | 2,722,000 | 2,787,000 | 3,020,000 | 2,806,000 | 2,614,000 | 2,371,000 | 2,253,000 | 2,317,000 | 3,316,000 | 3,634,000 |
| Return on total capital | 24.35% | 20.78% | 15.82% | 9.78% | 7.95% | 4.03% | -1.37% | -0.57% | -10.13% | 1.35% | 11.65% | 14.45% | 18.40% | 11.37% | -18.84% | -27.98% | -27.57% | -26.86% | 13.23% | 25.07% |
August 3, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $1,069,000K ÷ ($1,489,000K + $2,901,000K)
= 24.35%
The return on total capital for The Gap, Inc. has shown fluctuating performance over the past several quarters. The ratio has ranged from -27.98% to 24.35% during the period under consideration.
In recent periods, the return on total capital has been generally positive, indicating that the company has been able to generate a satisfactory return on its total capital investment. The highest return was recorded in August 2024 at 24.35%, which suggests efficient use of capital to generate profits.
However, the ratio has also dipped into negative territory in some quarters, such as in January 2021 and October 2020. This indicates that in those periods, the company's operations were not generating sufficient profits to cover the cost of its total capital.
Overall, it is important for The Gap, Inc. to focus on sustaining positive returns on total capital to ensure long-term financial health and viability. Monitoring this ratio closely can help evaluate the company's capital efficiency and profitability in relation to the total capital invested in its operations.
Peer comparison
Aug 3, 2024