Dave & Buster’s Entertainment (PLAY)

Return on total capital

		Feb 4, 2024	Oct 29, 2023	Jul 30, 2023	Apr 30, 2023	Jan 29, 2023	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Jan 30, 2022	Oct 31, 2021	Aug 1, 2021	May 2, 2021	Jan 31, 2021	Nov 1, 2020	Aug 2, 2020	May 3, 2020	Feb 2, 2020	Nov 3, 2019	Aug 4, 2019	May 5, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	306,600	294,308	305,808	285,208	262,508	231,849	226,218	248,885	187,181	86,591	5,175	-155,107	-253,516	-161,859	-98,413	28,916	148,079	151,457	160,430	160,146
Long-term debt	US$ in thousands	1,284,000	1,281,300	1,278,700	1,221,100	1,222,700	1,222,210	1,219,680	431,966	431,395	484,677	537,816	537,102	596,388	561,815	731,646	735,261	632,689	640,384	552,079	427,774
Total stockholders’ equity	US$ in thousands	251,200	211,600	314,400	359,900	410,500	361,000	356,400	351,800	275,500	246,559	229,875	178,642	153,232	206,774	250,371	192,635	169,650	148,121	249,302	360,125
Return on total capital		19.97%	19.71%	19.20%	18.04%	16.07%	14.64%	14.35%	31.76%	26.48%	11.84%	0.67%	-21.67%	-33.82%	-21.06%	-10.02%	3.12%	18.46%	19.21%	20.02%	20.33%

February 4, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $306,600K ÷ ($1,284,000K + $251,200K)
= 19.97%

Dave & Buster’s Entertainment has shown a fluctuating trend in its return on total capital over the past several quarters. The return on total capital has ranged from a low of -33.82% to a high of 31.76% during the period under review. In recent quarters, there has been an improvement in the return on total capital, with the latest figure reported at 19.97%. This indicates that for every dollar of capital invested in the company, it generated a return of approximately 19.97%.

The return on total capital is an important measure of a company's profitability and efficiency in generating returns for both debt and equity investors. A higher return on total capital is generally seen as favorable, indicating that the company is effectively utilizing its capital to generate profits. On the other hand, a lower return on total capital may signal inefficiencies or challenges in the company's operations.

It is important for investors and analysts to closely monitor the return on total capital over time to assess the company's performance and financial health. Dave & Buster’s Entertainment's management should continue to focus on improving this metric to drive long-term value creation for shareholders and stakeholders.