McCormick & Company Incorporated (MKC)
Return on total capital
| Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | May 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,105,100 | 1,063,300 | 1,017,500 | 1,072,100 | 1,001,400 | 999,700 | 1,004,300 | 962,000 | 1,052,800 | 1,084,600 | 1,087,300 | 1,096,000 | 1,102,000 | 1,057,900 | 1,085,600 | 1,069,100 | 1,022,300 | 1,025,300 | 1,020,700 | 993,800 |
| Long-term debt | US$ in thousands | 3,329,100 | 3,339,900 | 3,385,300 | 4,117,600 | 3,619,800 | 3,642,300 | 3,904,800 | 3,920,300 | 3,964,500 | 3,973,300 | 3,985,000 | 4,735,900 | 4,739,200 | 3,753,800 | 3,737,500 | 4,113,600 | 3,627,900 | 3,625,800 | 3,843,100 | 3,977,500 |
| Total stockholders’ equity | US$ in thousands | 5,232,500 | 5,060,700 | 5,049,300 | 4,937,000 | 4,870,100 | 4,680,500 | 4,589,300 | 4,598,200 | 4,597,700 | 4,411,000 | 4,386,500 | 4,325,300 | 4,149,500 | 3,926,100 | 3,932,700 | 3,649,900 | 3,561,900 | 3,444,200 | 3,468,700 | 3,370,900 |
| Return on total capital | 12.91% | 12.66% | 12.06% | 11.84% | 11.80% | 12.01% | 11.82% | 11.29% | 12.30% | 12.94% | 12.99% | 12.10% | 12.40% | 13.77% | 14.15% | 13.77% | 14.22% | 14.50% | 13.96% | 13.52% |
February 29, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $1,105,100K ÷ ($3,329,100K + $5,232,500K)
= 12.91%
Over the past 20 quarters, McCormick & Company Incorporated has maintained a relatively stable trend in its return on total capital, ranging from 11.29% to 14.50%. The return on total capital measures the efficiency with which the company generates profits from its total capital employed, including both debt and equity.
The company's return on total capital has generally been healthy, consistently above 10%, indicating that McCormick has been effectively utilizing its capital investments to generate returns for its shareholders. The highest return on total capital was recorded in the third quarter of 2020 at 14.50%, while the lowest was in the fourth quarter of 2022 at 11.29%.
Overall, the trend suggests that McCormick has demonstrated a strong ability to generate returns on the capital it has invested over the past five years. Investors and stakeholders can view this consistent performance positively as it indicates the company's efficient use of resources to drive profitability.