Hershey Co (HSY)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 2,648,250 | 2,333,380 | 2,046,330 | 1,916,100 | 1,638,880 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 4,714,650 | 4,099,090 | 3,299,540 | 2,757,230 | 2,237,880 |
| Return on total capital | 56.17% | 56.92% | 62.02% | 69.49% | 73.23% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $2,648,250K ÷ ($—K + $4,714,650K)
= 56.17%
Hershey Co's return on total capital has shown a declining trend over the past five years. In December 2020, the return on total capital was 73.23%, indicating that the company generated $0.7323 in profit for every dollar of total capital employed.
However, by December 2024, the return on total capital had decreased to 56.17%. This suggests that Hershey Co's profitability relative to its total capital has weakened over this period.
The downward trajectory of the return on total capital could raise concerns about the company's efficiency in generating profits from its capital base. Hershey Co may need to assess its capital allocation strategies and operational efficiency to improve its returns in the future.
Peer comparison
Dec 31, 2024