KB Home (KBH)

Return on total capital

		Nov 30, 2023	Nov 30, 2022	Nov 30, 2021	Nov 30, 2020	Nov 30, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	6,179,380	6,633,010	5,505,970	3,956,120	348,175
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	3,810,140	3,660,800	3,019,480	2,665,770	2,383,120
Return on total capital		162.18%	181.19%	182.35%	148.40%	14.61%

November 30, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $6,179,380K ÷ ($—K + $3,810,140K)
= 162.18%

Based on the provided data, KB Home's return on total capital has varied over the past five years. In November 2023, the return on total capital was 13.77%, representing a decrease from the previous year's figure of 19.55% in November 2022. However, compared to November 2021 and 2020, the return on total capital has shown improvement, with 14.87% and 8.19%, respectively. In November 2019, the return on total capital was 8.54%.

The return on total capital measures the efficiency and effectiveness of the company in generating profits from the total capital employed. The decreasing trend in recent years may indicate a potential decrease in the company's ability to generate profits relative to its capital base. It is important for investors and stakeholders to closely monitor this trend, as a declining return on total capital may raise concerns about the company's profitability and efficient use of capital resources.