Lamb Weston Holdings Inc (LW)
Return on total capital
| May 26, 2024 | Feb 25, 2024 | Nov 26, 2023 | Aug 27, 2023 | May 28, 2023 | Feb 26, 2023 | Nov 27, 2022 | Aug 28, 2022 | May 29, 2022 | Feb 27, 2022 | Nov 28, 2021 | Aug 29, 2021 | May 30, 2021 | Feb 28, 2021 | Nov 29, 2020 | Aug 30, 2020 | May 31, 2020 | Feb 23, 2020 | Nov 24, 2019 | Aug 25, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,065,300 | 1,039,800 | 1,082,200 | 1,048,400 | 882,100 | 831,100 | 698,600 | 541,200 | 444,400 | 407,300 | 374,100 | 399,300 | 474,800 | 406,800 | 468,700 | 522,600 | 556,900 | 674,000 | 705,300 | 685,800 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,787,800 | 1,758,200 | 1,667,700 | 1,503,000 | 1,411,300 | 714,800 | 573,000 | 510,000 | 360,500 | 392,300 | 365,200 | 427,400 | 480,600 | 451,700 | 408,900 | 332,000 | 240,000 | 270,400 | 201,100 | 92,300 |
| Return on total capital | 59.59% | 59.14% | 64.89% | 69.75% | 62.50% | 116.27% | 121.92% | 106.12% | 123.27% | 103.82% | 102.44% | 93.43% | 98.79% | 90.06% | 114.62% | 157.41% | 232.04% | 249.26% | 350.72% | 743.01% |
May 26, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $1,065,300K ÷ ($—K + $1,787,800K)
= 59.59%
Return on total capital is a key financial ratio that indicates how effectively a company is generating returns from the total invested capital, including both debt and equity. In the case of Lamb Weston Holdings Inc, the return on total capital has shown significant fluctuations over the past several quarters.
From November 2019 to May 2020, the return on total capital steadily increased from 350.72% to 743.01%, indicating a strong performance in generating profits from the total capital employed. However, this high level of return was not sustainable, as there was a notable decrease in the ratio in the subsequent quarters.
The ratio peaked at 232.04% in August 2020 before experiencing a short-term decline and then a sharp increase to 157.41% in November 2020. The trend continued with fluctuations in the ratio, reaching its lowest point at 59.14% in February 2024.
Overall, the return on total capital for Lamb Weston Holdings Inc has been volatile, reflecting fluctuations in the company's profitability and capital utilization efficiency. It is essential for investors and analysts to closely monitor these trends to assess the company's financial performance and sustainability in the long term.
Peer comparison
May 26, 2024