RH (RH)
Return on total capital
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 393,721 | 550,494 | 887,051 | 445,663 | 356,359 |
| Long-term debt | US$ in thousands | 17,766 | 17,909 | 1,129 | 14,614 | 31,053 |
| Total stockholders’ equity | US$ in thousands | -297,394 | 784,661 | 1,170,280 | 447,026 | 18,651 |
| Return on total capital | — | 68.59% | 75.73% | 96.54% | 716.96% |
February 3, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $393,721K ÷ ($17,766K + $-297,394K)
= —
The Return on Total Capital for RH has shown significant fluctuations over the past five years. In particular, there has been a notable decrease in the Return on Total Capital from 716.96% in 2020 to 96.54% in 2021, followed by a further decline to 75.73% in 2022. This downward trend indicates a decreasing efficiency in generating profits relative to the total capital employed by the company. However, the Return on Total Capital experienced a slight improvement to 68.59% in 2023.
Overall, the Return on Total Capital for RH remains relatively high compared to industry standards, but the recent declining trend should be closely monitored to assess the company's ability to efficiently utilize its capital resources in generating returns for its stakeholders.