Jabil Circuit Inc (JBL)

Return on total capital

		Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020	Aug 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	1,537,000	1,382,000	1,072,000	432,000	637,000
Long-term debt	US$ in thousands	2,875,000	2,575,000	2,878,000	2,678,000	2,121,280
Total stockholders’ equity	US$ in thousands	2,866,000	2,451,000	2,136,000	1,811,000	1,887,440
Return on total capital		26.77%	27.50%	21.38%	9.62%	15.89%

August 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,537,000K ÷ ($2,875,000K + $2,866,000K)
= 26.77%

Jabil Inc's return on total capital has shown a positive trend over the past five years. The return on total capital, which represents the company's ability to generate profits from its total capital employed, increased from 16.59% in 2019 to 27.77% in 2023. This signifies a consistent improvement in the company's efficiency in utilizing its capital to generate returns.

The significant increase in return on total capital from 2019 to 2023 reflects Jabil Inc's enhanced operational performance and potentially better capital allocation strategies. This improvement could be attributed to various factors such as effective cost management, increased productivity, and improved profitability of the company's operations.

The consistent growth in return on total capital indicates that Jabil Inc has been successful in generating higher returns relative to the capital invested, which is a positive indicator for the company's financial health and efficiency. It suggests that the company is effectively utilizing its resources and capital to drive profitability and create value for its stakeholders.

Overall, the increasing trend in Jabil Inc's return on total capital demonstrates the company's ability to efficiently leverage its capital to generate higher returns, indicating positive prospects for future growth and financial performance.