RPM International Inc (RPM)
Return on total capital
| May 31, 2025 | Feb 28, 2025 | Nov 30, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 614,988 | 881,542 | 929,706 | 919,719 | 905,806 | 881,617 | 855,185 | 832,066 | 790,094 | 790,761 | 774,047 | 718,545 | 656,769 | 636,136 | 635,215 | 671,048 | 731,526 | 707,778 | 691,669 | 640,436 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 2,885,360 | 2,674,280 | 2,716,030 | 2,649,430 | 2,510,880 | 2,346,810 | 2,360,550 | 2,281,140 | 2,140,840 | 2,053,160 | 2,090,460 | 1,996,060 | 1,982,430 | 1,835,050 | 1,836,110 | 1,788,580 | 1,741,060 | 1,547,480 | 1,547,740 | 1,449,590 |
| Return on total capital | 21.31% | 32.96% | 34.23% | 34.71% | 36.08% | 37.57% | 36.23% | 36.48% | 36.91% | 38.51% | 37.03% | 36.00% | 33.13% | 34.67% | 34.60% | 37.52% | 42.02% | 45.74% | 44.69% | 44.18% |
May 31, 2025 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $614,988K ÷ ($—K + $2,885,360K)
= 21.31%
The analysis of RPM International Inc.'s return on total capital (ROTC) over the specified period reveals several noteworthy trends and patterns. Initially, the company's ROTC was relatively high, starting at 44.18% as of August 31, 2020, and showing a slight upward trajectory by November 30, 2020, reaching 44.69%. This upward momentum continued into February 28, 2021, with a peak of 45.74%, indicating strong efficiency in generating earnings from total capital during this period.
Subsequently, beginning in May 2021, a declining trend became apparent. The ROTC decreased to 42.02% on May 31, 2021, and continued to decline through August 2021, where it registered at 37.52%. The downward movement persisted into late 2021 and early 2022, with figures settling around mid-30s—34.60% on November 30, 2021, 34.67% on February 28, 2022, and 33.13% on May 31, 2022. The partial recovery seen thereafter saw the ROTC rise back to 36.00% in August 2022, and maintaining relatively steady levels through November 2022 and February 2023, with values of 37.03% and 38.51%, respectively.
In 2023, the ROTC generally remained stable but exhibited minor fluctuations, with figures hovering around mid to high 30s—36.91% in May 2023, 36.48% in August, and 36.23% in November. A slight increase was observed in February 2024, reaching 37.57%. The subsequent periods show a gradual decline, with the ROTC falling to 36.08% in May 2024, then further decreasing to 34.71% in August, and 34.23% in November 2024.
Looking ahead into 2025, a sharp decline is evident, with the ROTC dropping to 32.96% in February and a significant decrease to 21.31% by May. This significant reduction suggests deterioration in the company's ability to generate returns from its total capital, raising potential concerns about operational efficiency, capital structure, or external economic factors impacting profitability.
Overall, RPM International Inc. experienced a high level of return on total capital early in the observed period, followed by a persistent decline over the subsequent years. The fluctuations around the mid-30s to high-30s indicate periods of relative stability, but the steep decline projected into early 2025 highlights potential challenges or structural changes affecting the company's capacity to generate returns efficiently from its total capital base.
Peer comparison
May 31, 2025