Neogen Corporation (NEOG)
Return on total capital
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 61,370 | 37,515 | 84,199 | 77,254 | 67,523 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 3,144,140 | 3,134,220 | 887,374 | 840,377 | 725,177 |
| Return on total capital | 1.95% | 1.20% | 9.49% | 9.19% | 9.31% |
May 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $61,370K ÷ ($—K + $3,144,140K)
= 1.95%
Neogen Corporation's return on total capital has exhibited fluctuating trends over the past five years. From May 31, 2020, to May 31, 2022, the return on total capital remained relatively stable, fluctuating within a narrow range of 9.19% to 9.49%.
However, a noticeable decline in the return on total capital was observed as of May 31, 2023, when it significantly dropped to 1.20%. This decline continued into the following year, with the return on total capital slightly improving to 1.95% as of May 31, 2024.
The decreasing trend in return on total capital over the last two years may indicate potential concerns regarding the company's ability to efficiently utilize its total capital to generate profits. Neogen Corporation may need to assess its capital allocation strategies and operational efficiency to improve its return on total capital in the future.
Peer comparison
May 31, 2024