HNI Corp (HNI)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 90,300 | 155,200 | 85,453 | 61,390 | 151,344 |
| Long-term debt | US$ in thousands | 428,300 | 188,800 | 174,600 | 174,524 | 174,439 |
| Total stockholders’ equity | US$ in thousands | 761,400 | 616,500 | 589,600 | 590,419 | 584,044 |
| Return on total capital | 7.59% | 19.27% | 11.18% | 8.03% | 19.95% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $90,300K ÷ ($428,300K + $761,400K)
= 7.59%
HNI Corp's return on total capital has fluctuated over the past five years. In 2023, the company achieved a return on total capital of 7.59%, which represented a significant decrease compared to the previous year's figure of 19.27%. This decline in return on total capital indicates a decrease in the company's ability to generate profits from its total capital investments.
The 2023 return on total capital of 7.59% is also lower compared to the 5-year average return on total capital, indicating potential challenges in effectively utilizing its capital resources. It is important for HNI Corp to assess the factors contributing to this decline and take strategic actions to improve its return on total capital in order to enhance shareholder value and ensure sustainable growth.