Helen of Troy Ltd (HELE)
Return on total capital
| Feb 28, 2025 | Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 143,586 | 262,107 | 211,895 | 268,050 | 277,670 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,683,440 | 1,637,440 | 1,488,810 | 1,327,340 | 1,239,350 |
| Return on total capital | 8.53% | 16.01% | 14.23% | 20.19% | 22.40% |
February 28, 2025 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $143,586K ÷ ($—K + $1,683,440K)
= 8.53%
From the data provided, Helen of Troy Ltd's return on total capital has shown a declining trend over the past five years. The return on total capital was 22.40% as of February 28, 2021, but decreased to 20.19% by February 28, 2022. Subsequently, there was a further decline to 14.23% by February 28, 2023. However, there was a slight improvement to 16.01% by February 29, 2024, followed by a more significant decrease to 8.53% by February 28, 2025.
The decreasing trend in return on total capital may indicate challenges in generating returns on the total capital employed by the company. It suggests that the company may be experiencing difficulties in efficiently utilizing its total capital to generate profits. It would be essential for Helen of Troy Ltd to analyze the factors contributing to this decline and implement strategies to improve its return on total capital in order to enhance its overall financial performance and shareholder value.