Neogen Corporation (NEOG)

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	40,963	43,128	28,952	22,750	23,273	22,810	42,935	58,618	60,846	70,243	77,019	74,169	73,858	71,127	70,154	67,523	66,309	67,905	67,879	68,094
Long-term debt	US$ in thousands	887,653	886,915	886,177	885,439	884,701	923,962	—	0	—	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	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	711,871	690,917	660,306	637,899
Return on total capital		1.02%	1.07%	0.72%	0.57%	0.58%	0.57%	4.86%	6.61%	6.95%	8.12%	9.00%	8.83%	9.14%	9.15%	9.33%	9.31%	9.31%	9.83%	10.28%	10.67%

February 29, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $40,963K ÷ ($887,653K + $3,146,170K)
= 1.02%

Neogen Corporation's return on total capital has exhibited fluctuations over the past few quarters. The return on total capital ranged from 1.02% to 10.67% during the periods specified. The return on total capital was relatively low in the earlier quarters, hovering around 0.50% to 1.00%. However, there was a notable improvement in the return on total capital in the later quarters, with figures exceeding 6.00%.

Notably, the return on total capital reached its peak at 10.67% in the most recent period, indicating a strong performance in utilizing its total capital to generate returns. This upward trend in the return on total capital from the lower levels to over 10% suggests that the company has potentially improved its efficiency in capital allocation and profitability over the analyzed period.

Overall, the return on total capital for Neogen Corporation has shown variability, but the recent trend of increasing returns indicates improved effectiveness in utilizing total capital to generate profits.