CarMax Inc (KMX)
Return on total capital
| Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 766,345 | 757,202 | 1,586,440 | 1,051,440 | 1,243,990 |
| Long-term debt | US$ in thousands | 1,602,360 | 1,909,360 | 3,255,300 | 1,322,420 | 1,778,670 |
| Total stockholders’ equity | US$ in thousands | 6,073,740 | 5,613,080 | 5,235,440 | 4,364,610 | 3,768,880 |
| Return on total capital | 9.98% | 10.07% | 18.68% | 18.49% | 22.42% |
February 29, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $766,345K ÷ ($1,602,360K + $6,073,740K)
= 9.98%
CarMax Inc's return on total capital has exhibited a declining trend over the past five years. In fiscal year 2020, the company achieved a relatively high return on total capital of 22.42%. However, this figure has since decreased, with subsequent years showing returns of 18.49%, 18.68%, 10.07%, and 9.98% for fiscal years 2021 to 2024, respectively. This declining trend may indicate challenges in generating returns relative to the total capital employed by the company. It is essential for CarMax Inc to assess the factors contributing to this trend and implement strategies to improve its return on total capital in the future.
Peer comparison
Feb 29, 2024