Paychex Inc (PAYX)
Return on total capital
| 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 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 2,174,100 | 2,145,600 | 2,107,700 | 2,073,800 | 2,033,100 | 1,973,800 | 1,924,700 | 1,892,700 | 1,840,000 | 1,799,800 | 1,705,600 | 1,619,600 | 1,460,700 | 1,406,500 | 1,408,000 | 1,395,400 | 1,460,500 | 1,475,400 | 1,434,600 | 1,400,100 |
| Long-term debt | US$ in thousands | 798,600 | 798,500 | 798,400 | 798,300 | 798,200 | 798,100 | 797,900 | 797,800 | 797,700 | 797,600 | 797,500 | 797,400 | 797,300 | 797,200 | 797,000 | 796,900 | 796,800 | 796,700 | 796,600 | 796,500 |
| Total stockholders’ equity | US$ in thousands | 3,801,000 | 3,747,100 | 3,524,400 | 3,587,800 | 3,493,200 | 3,401,100 | 3,205,300 | 3,137,400 | 3,085,200 | 3,286,000 | 3,119,800 | 3,043,500 | 2,948,000 | 2,976,400 | 2,889,700 | 2,778,600 | 2,781,400 | 2,759,800 | 2,569,400 | 2,519,300 |
| Return on total capital | 47.27% | 47.20% | 48.76% | 47.28% | 47.38% | 47.00% | 48.08% | 48.10% | 47.39% | 44.07% | 43.54% | 42.17% | 39.00% | 37.27% | 38.19% | 39.03% | 40.82% | 41.48% | 42.62% | 42.23% |
May 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $2,174,100K ÷ ($798,600K + $3,801,000K)
= 47.27%
Paychex Inc's return on total capital has been consistently strong over the past few quarters, ranging from 37.27% to 48.76%. This indicates an efficient utilization of both debt and equity in generating profits. The company's ability to generate high returns on its total capital is a positive sign for investors and stakeholders, showcasing effective management of resources and a strong business model. The trend of increasing return on total capital over the last few quarters suggests that the company is improving its operational efficiency and profitability, which can lead to sustainable growth in the long term. It is important for Paychex Inc to continue monitoring and maintaining this metric to ensure continued financial success and value creation for its shareholders.