Hanesbrands Inc (HBI)
Return on total capital
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 288,782 | 253,020 | 328,502 | 406,352 | 519,545 | 614,776 | 707,978 | 778,118 | 797,728 | 245,655 | 200,096 | 184,835 | 42,666 | 682,588 | 760,572 | 788,039 | 889,730 | 890,438 | 879,424 | 869,062 |
| Long-term debt | US$ in thousands | 3,235,640 | 3,310,260 | 3,504,280 | 3,588,940 | 3,612,080 | 3,655,890 | 3,627,200 | 3,325,040 | 3,326,090 | 3,626,550 | 3,647,480 | 3,649,630 | 3,739,430 | 3,972,210 | 3,985,630 | 4,236,960 | 3,256,870 | 3,467,590 | 3,671,070 | 3,615,490 |
| Total stockholders’ equity | US$ in thousands | 419,353 | 274,036 | 347,960 | 339,526 | 398,264 | 674,884 | 712,171 | 779,416 | 702,493 | 636,569 | 562,190 | 484,481 | 813,958 | 1,149,530 | 1,079,320 | 873,571 | 1,236,600 | 1,118,090 | 1,025,390 | 932,991 |
| Return on total capital | 7.90% | 7.06% | 8.53% | 10.34% | 12.96% | 14.20% | 16.32% | 18.96% | 19.80% | 5.76% | 4.75% | 4.47% | 0.94% | 13.33% | 15.02% | 15.42% | 19.80% | 19.42% | 18.73% | 19.11% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $288,782K ÷ ($3,235,640K + $419,353K)
= 7.90%
Return on total capital is a key financial ratio that measures a company's ability to generate profits from its invested capital. Hanesbrands Inc's return on total capital has varied over the past few quarters. The ratio was consistently high in 2019 and early 2020, reaching a peak of 19.80% in both March and December 2020. However, it started to decline in mid-2020 and continued to drop in 2021, hitting a low of 0.94% in March 2021.
There was a recovery in the ratio in the latter part of 2021 and early 2022, with a slight decrease in the subsequent quarters. The return on total capital increased to 8.53% in June 2023 but decreased slightly in September 2023 to 7.06%. In the most recent quarter, December 2023, the return on total capital improved to 7.90%.
Overall, the trend in Hanesbrands Inc's return on total capital has been somewhat volatile, with periods of both strong and weak performance. It is important for investors to closely monitor this ratio to assess the company's efficiency in generating profits relative to its total capital employed.