PriceSmart Inc (PSMT)

Return on total capital

		Aug 31, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	217,952	202,143	196,572	187,112	180,176	185,001	172,493	170,168	166,003	159,301	161,678	158,669	154,142	153,124	141,930	136,893	123,498	125,500	124,976	121,498
Long-term debt	US$ in thousands	94,443	98,426	102,350	99,704	119,487	124,631	126,383	118,505	103,556	108,182	120,057	110,601	110,110	101,294	106,160	108,104	112,610	117,045	113,879	98,084
Total stockholders’ equity	US$ in thousands	1,122,960	1,095,350	1,093,870	1,082,240	1,107,040	1,089,690	1,043,910	1,026,360	991,073	968,198	953,884	942,146	915,345	898,803	874,268	866,167	831,719	818,666	817,893	816,829
Return on total capital		17.90%	16.93%	16.43%	15.83%	14.69%	15.23%	14.74%	14.86%	15.17%	14.80%	15.05%	15.07%	15.03%	15.31%	14.48%	14.05%	13.08%	13.41%	13.41%	13.28%

August 31, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $217,952K ÷ ($94,443K + $1,122,960K)
= 17.90%

The return on total capital for PriceSmart Inc has shown a generally positive trend over the past few periods. There has been a gradual increase in the return on total capital, with the latest reported figure standing at 17.90%. This indicates that PriceSmart Inc is generating a solid return on the capital employed in its operations.

The company's ability to generate a return on total capital above 15% consistently over the past several periods is a positive sign of operational efficiency and effective capital allocation. Investors and stakeholders may view this as a good indicator of the company's profitability and resource utilization. It suggests that PriceSmart Inc is effectively utilizing its capital to generate profits for its shareholders.

Overall, the upward trend in the return on total capital for PriceSmart Inc is a positive indicator of the company's financial health and operational performance. Investors may view this as a strong factor in assessing the company's ability to generate returns on the capital invested in its business activities.