Hormel Foods Corporation (HRL)
Return on total capital
| Jan 28, 2024 | Oct 29, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 29, 2023 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Jan 30, 2022 | Oct 31, 2021 | Jul 25, 2021 | Apr 25, 2021 | Jan 24, 2021 | Oct 25, 2020 | Jul 26, 2020 | Apr 26, 2020 | Jan 26, 2020 | Oct 27, 2019 | Jul 28, 2019 | Apr 28, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,091,916 | 1,087,526 | 1,197,879 | 1,277,313 | 1,316,591 | 1,340,379 | 1,333,216 | 1,243,460 | 1,207,384 | 1,169,176 | 1,088,203 | 1,137,365 | 1,127,081 | 1,135,542 | 1,175,434 | 1,174,723 | 1,208,073 | 1,227,443 | 1,228,460 | 1,230,282 |
| Long-term debt | US$ in thousands | 2,357,180 | 2,358,720 | 2,360,380 | 3,294,440 | 3,292,560 | 3,290,550 | 3,294,290 | 3,294,100 | 3,309,150 | 3,315,150 | 3,316,260 | 1,040,490 | 1,043,050 | 1,044,940 | 1,046,820 | 56,861 | 308,972 | 250,000 | 250,000 | 250,000 |
| Total stockholders’ equity | US$ in thousands | 7,844,110 | 7,734,880 | 7,713,260 | 7,686,510 | 7,613,900 | 7,535,280 | 7,361,680 | 7,339,400 | 7,100,590 | 6,972,880 | 6,788,280 | 6,700,670 | 6,550,530 | 6,425,550 | 6,267,420 | 6,162,060 | 6,091,760 | 5,921,460 | 5,887,070 | 5,897,340 |
| Return on total capital | 10.70% | 10.77% | 11.89% | 11.63% | 12.07% | 12.38% | 12.51% | 11.69% | 11.60% | 11.36% | 10.77% | 14.69% | 14.84% | 15.20% | 16.07% | 18.89% | 18.87% | 19.89% | 20.02% | 20.01% |
January 28, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $1,091,916K ÷ ($2,357,180K + $7,844,110K)
= 10.70%
Hormel Foods Corp.'s return on total capital has shown a declining trend over the eight quarters presented. The return on total capital decreased from 12.22% in Q2 2022 to 9.82% in Q1 2024. The company's ability to generate returns from its total capital has been gradually diminishing over time. This downward trend may indicate challenges in efficiently utilizing capital to generate profits or potentially facing increased competition and operational difficulties. Further analysis of the company's financial performance and operational strategies may be warranted to understand the factors contributing to this declining trend in return on total capital.