GMS Inc (GMS)
Return on total capital
| Apr 30, 2025 | Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | — | 449,627 | 513,346 | 422,916 | 191,737 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,420,180 | 1,460,520 | 1,274,760 | 1,064,500 | 822,462 |
| Return on total capital | 0.00% | 30.79% | 40.27% | 39.73% | 23.31% |
April 30, 2025 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $—K ÷ ($—K + $1,420,180K)
= 0.00%
The analysis of GMS Inc.'s return on total capital over the specified period reveals significant fluctuations. As of April 30, 2021, the return on total capital stood at 23.31%, indicating a relatively solid efficiency in generating earnings from the company's total capital base. This figure increased markedly by April 30, 2022, reaching 39.73%, nearly doubling the previous year's performance and reflecting a substantial improvement in how effectively the company utilized its capital to generate profits.
The positive trend continued into April 30, 2023, with the return on total capital marginally rising to 40.27%, signifying sustained operational efficiency and effective capital management. However, a decline is observed in the subsequent period ending April 30, 2024, where the return decreased to 30.79%. This reduction suggests a potential slowdown in profitability or increased capital deployment that has not translated proportionally into earnings.
By April 30, 2025, the return on total capital is reported at 0.00%. This sharp decline could be indicative of several scenarios, including a significant reduction in net income, a strategic shift resulting in lower immediate returns, or possibly the recognition of extraordinary items or accounting adjustments that impact profitability metrics. It warrants a further detailed review of the company's financial statements to determine the underlying causes for such a drastic change.
Overall, GMS Inc. experienced strong growth in its return on total capital during the period from 2021 to 2023, followed by a notable decline thereafter. The trend underscores the importance of evaluating the company's ongoing operational strategies and capital management practices, especially given the dramatic drop observed in 2025.
Peer comparison
Apr 30, 2025