Griffon Corporation (GFF)
Return on total capital
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 398,297 | 214,127 | -90,343 | 182,039 | 146,010 |
| Long-term debt | US$ in thousands | 1,515,900 | 1,459,900 | 1,561,000 | 1,033,200 | 1,037,040 |
| Total stockholders’ equity | US$ in thousands | 224,888 | 315,244 | 477,570 | 807,158 | 700,151 |
| Return on total capital | 22.88% | 12.06% | -4.43% | 9.89% | 8.40% |
September 30, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $398,297K ÷ ($1,515,900K + $224,888K)
= 22.88%
Griffon Corporation's return on total capital has shown varying performance over the past five years. In 2024, the return on total capital increased significantly to 22.88% from 12.06% in 2023, indicating a more efficient use of total capital to generate profits. This improvement suggests better profitability in relation to the capital invested.
The negative return on total capital of -4.43% in 2022 indicates that Griffon Corporation suffered a loss in that year, surpassing the earnings generated by the capital employed. This could be a result of operating inefficiencies or financial challenges faced during that period.
The return on total capital in 2021 and 2020 at 9.89% and 8.40% respectively reflects a moderate level of profitability compared to the capital invested. While these figures indicate that Griffon Corporation was able to generate positive returns on its total capital, the levels were not as high as in 2024.
Overall, the trend in Griffon Corporation's return on total capital shows improvement in recent years, with a significant increase in 2024. However, the negative return in 2022 highlights a period of financial difficulty. Monitoring this ratio over time can provide insights into the company's profitability and efficiency in utilizing its capital resources effectively.