Kennametal Inc (KMT)
Return on total capital
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 156,934 | 171,942 | 199,123 | 239,439 | 156,229 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,283,980 | 1,249,880 | 1,275,450 | 1,252,580 | 1,329,610 |
| Return on total capital | 12.22% | 13.76% | 15.61% | 19.12% | 11.75% |
June 30, 2025 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $156,934K ÷ ($—K + $1,283,980K)
= 12.22%
The return on total capital for Kennametal Inc. demonstrates a fluctuating trend over the analyzed period from June 30, 2021, to June 30, 2025. As of June 30, 2021, the ratio stood at 11.75%, indicating a relatively modest efficiency in generating earnings from the total capital invested. By June 30, 2022, the return increased significantly to 19.12%, reflecting an improvement in operational efficiency or possibly favorable market conditions that enhanced the company's ability to generate profit from its total capital.
Following this peak in 2022, the return experienced a decline to 15.61% by June 30, 2023. This decrease suggests a potential reduction in profitability or increased capital costs during that period. The trend continued downward to 13.76% at June 30, 2024, indicating a further decrease in the company's efficiency in utilizing its total capital base. By June 30, 2025, the return declined to 12.22%, which, although lower, remains above the 2021 level, implying that the company's overall capital revitalization efforts or market conditions have stabilized at a somewhat improved but diminished level compared to the peak in 2022.
Overall, the period reflects a pattern of growth followed by a gradual decline, with the return on total capital decreasing from its peak in 2022 but still maintaining levels above the initial figure in 2021. The fluctuations could be attributed to changes in operational performance, investment strategies, or macroeconomic influences that impacted profitability and capital utilization efficiency for Kennametal Inc.