Quanex Building Products (NX)
Return on total capital
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 105,182 | 112,322 | 82,624 | 55,545 | -26,311 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 545,554 | 464,835 | 419,782 | 355,759 | 330,187 |
| Return on total capital | 19.28% | 24.16% | 19.68% | 15.61% | -7.97% |
October 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $105,182K ÷ ($—K + $545,554K)
= 19.28%
Based on the provided data, Quanex Building Products Corp's return on total capital has fluctuated over the past five years. Return on total capital is a measure of a company's profitability in relation to its total capital, which includes both equity and debt. A higher return on total capital indicates effective utilization of funds to generate profits.
In 2019, the return on total capital was 9.96%, which increased to 11.81% in 2020, reflecting an upward trend. This improvement suggests that the company became more efficient in utilizing its capital to generate profits.
The trend continued into 2021 with a return on total capital of 17.33%, indicating a significant improvement in the company's profitability and capital efficiency. However, in 2022, the return on total capital experienced a slight decline to 22.46%, which could be an indication of changes in the company's capital structure or profitability dynamics.
The most recent data for 2023 shows a return on total capital of 18.02%, representing a decrease from the previous year. While still relatively high, this decrease suggests a potential change in the company's profitability or capital management strategies.
Overall, Quanex Building Products Corp's return on total capital has shown fluctuations over the five-year period, with some years exhibiting significant improvements while others experienced slight declines. The company may need to closely monitor and manage its capital usage and profitability to ensure sustainable and consistent returns in the future.
Peer comparison
Oct 31, 2023