Premier Inc (PINC)
Return on total capital
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 127,972 | 242,093 | 260,073 | 256,917 | 373,620 |
| Long-term debt | US$ in thousands | 0 | 102,257 | 203,468 | 304,328 | 4,640 |
| Total stockholders’ equity | US$ in thousands | 1,962,230 | 2,334,360 | 2,248,850 | 2,229,890 | 1,859,570 |
| Return on total capital | 6.52% | 9.94% | 10.61% | 10.14% | 20.04% |
June 30, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $127,972K ÷ ($0K + $1,962,230K)
= 6.52%
Premier Inc's return on total capital has experienced a declining trend over the past five years. In the most recent fiscal year ending June 30, 2024, the return on total capital stood at 6.52%, which is significantly lower compared to the previous year's 9.94% and a substantial drop from the peak of 20.04% recorded in June 30, 2020. This decline suggests that Premier Inc may be facing challenges in generating returns on its invested capital efficiently. It is essential for the company to closely examine its capital allocation strategies and operational performance to enhance its return on total capital in the future.
Peer comparison
Jun 30, 2024