Medtronic PLC (MDT)
Return on total capital
| Apr 30, 2024 | Apr 26, 2024 | Apr 30, 2023 | Apr 28, 2023 | Apr 30, 2022 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 5,556,000 | 5,528,000 | 5,778,000 | 5,974,000 | 6,847,000 |
| Long-term debt | US$ in thousands | — | — | — | 21,700,000 | — |
| Total stockholders’ equity | US$ in thousands | 50,214,000 | 50,214,000 | 51,483,000 | 51,483,000 | 52,551,000 |
| Return on total capital | 11.06% | 11.01% | 11.22% | 8.16% | 13.03% |
April 30, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $5,556,000K ÷ ($—K + $50,214,000K)
= 11.06%
To analyze Medtronic PLC's return on total capital over the specified periods:
1. Medtronic PLC's return on total capital decreased from 13.03% in April 2022 to 8.16% in April 2023, indicating a decrease in the company's ability to generate profits relative to its total invested capital.
2. However, there was an improvement in the return on total capital in the subsequent periods. The ratio increased to 11.22% in April 2023, which suggests that the company's efficiency in utilizing its total capital improved during this period.
3. In April 2024, the return on total capital slightly declined to 11.01% before bouncing back to 11.06% by the end of the period. This indicates relative stability in Medtronic PLC's ability to generate returns on its total capital.
4. Overall, the trend in Medtronic PLC's return on total capital shows fluctuations over the analyzed period, with a notable decrease followed by recovery and stability. It is important for the company to monitor and manage its capital effectively to ensure sustainable profitability and value creation for its stakeholders.
Peer comparison
Apr 30, 2024