Hormel Foods Corporation (HRL)
Return on total capital
| Oct 31, 2024 | Oct 27, 2024 | Oct 31, 2023 | Oct 29, 2023 | Oct 31, 2022 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,116,330 | 1,067,930 | 1,086,870 | 1,087,530 | 1,340,620 |
| Long-term debt | US$ in thousands | — | 2,850,940 | — | 2,358,720 | — |
| Total stockholders’ equity | US$ in thousands | 7,993,420 | 7,993,420 | 7,734,880 | 7,734,880 | 7,535,280 |
| Return on total capital | 13.97% | 9.85% | 14.05% | 10.77% | 17.79% |
October 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,116,330K ÷ ($—K + $7,993,420K)
= 13.97%
The return on total capital for Hormel Foods Corporation has displayed fluctuations over the period under consideration. In October 2022, the return on total capital was 17.79%, indicating efficient utilization of both debt and equity capital to generate profits. However, there was a noticeable decrease in the return on total capital to 10.77% by October 2023, suggesting a potential decrease in profitability relative to the invested capital.
By October 2024, the return on total capital had increased to 13.97%, reflecting an improvement in the company's ability to generate returns on its total invested capital. Despite the fluctuations in this ratio, it is crucial to closely monitor trends to assess the company's long-term performance and capital allocation efficiency.