Neogen Corporation (NEOG)
Return on total capital
| Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -434,409 | -430,396 | 46,887 | 64,236 | 140,019 | 143,680 | 111,084 | 110,523 | 39,959 | 30,652 | 65,967 | 67,918 | 70,146 | 79,543 | 77,019 | 74,169 | 73,858 | 71,127 | 70,154 | 67,523 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 2,660,350 | 2,669,070 | 3,135,190 | 3,144,140 | 3,146,170 | 3,147,570 | 3,146,180 | 3,134,220 | 3,125,560 | 3,106,260 | 883,798 | 887,374 | 875,544 | 865,476 | 855,363 | 840,377 | 807,683 | 777,395 | 751,546 | 725,177 |
| Return on total capital | -16.33% | -16.13% | 1.50% | 2.04% | 4.45% | 4.56% | 3.53% | 3.53% | 1.28% | 0.99% | 7.46% | 7.65% | 8.01% | 9.19% | 9.00% | 8.83% | 9.14% | 9.15% | 9.33% | 9.31% |
February 28, 2025 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-434,409K ÷ ($—K + $2,660,350K)
= -16.33%
Neogen Corporation's return on total capital has exhibited fluctuations over the periods from May 31, 2020, to February 28, 2025. The ratio started at 9.31% in May 2020 and slightly increased to 9.33% in August 2020. However, from November 2020 to February 2022, the return on total capital showed a gradual decline, reaching 8.01% in February 2022.
Subsequently, there was a notable decrease in the ratio to 7.46% by August 2022, followed by a further decline to 0.99% in November 2022. This sharp decrease may indicate challenges in profitability and capital efficiency during this period.
From May 2023 onwards, there was a recovery in the return on total capital, with fluctuations between 3.53% to 4.56% up to November 2023. However, by February 2025, the ratio dropped significantly to -16.33%, suggesting a substantial decrease in profitability compared to the previous periods.
The declining trend in the return on total capital from August 2022 to February 2025 may raise concerns about Neogen Corporation's ability to generate returns on its invested capital efficiently and sustainably. It is essential for the company to focus on improving profitability and capital utilization to enhance overall financial performance.
Peer comparison
Feb 28, 2025