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.


Peer comparison

Feb 3, 2024

Company name
Symbol
Return on total capital
RH
RH
Haverty Furniture Companies Inc
HVT
21.77%