Scholastic Corporation (SCHL)
Return on total capital
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 14,700 | 18,100 | 113,800 | 92,600 | -33,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 946,500 | 1,018,100 | 1,164,500 | 1,218,400 | 1,182,300 |
| Return on total capital | 1.55% | 1.78% | 9.77% | 7.60% | -2.79% |
May 31, 2025 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $14,700K ÷ ($—K + $946,500K)
= 1.55%
The analysis of Scholastic Corporation's return on total capital over the specified period reveals notable fluctuations and a general trend of improvement punctuated by recent declines.
On May 31, 2021, the company's return on total capital stood at -2.79%, indicating that the firm was experiencing a loss relative to its total capital employed. This negative figure suggests that the company's operations were not generating adequate returns to cover its overall capital structure at that time.
By May 31, 2022, the return transitioned into positive territory, reaching 7.60%. This substantial increase indicates an improvement in the company's operational efficiency and profitability, enabling it to generate gains that exceeded its total capital base. The upward movement continued into May 31, 2023, with the return further rising to 9.77%, reflecting a period of strong financial performance and effective utilization of its capital resources.
However, in the subsequent period ending May 31, 2024, there was a notable decline to 1.78%. While still positive, this sharp decrease suggests a reduction in the company's ability to generate returns relative to its total capital, potentially due to increased costs, lower revenues, or strategic adjustments affecting profitability.
By May 31, 2025, the return further declined modestly to 1.55%, indicating persistent challenges in sustaining higher levels of return on total capital. Although still positive, this level reflects a significant decrease from the peak observed in 2023, highlighting ongoing pressures that may influence the company's financial performance.
Overall, the data underscores a period of recovery following a negative return in 2021, followed by substantial gains in 2022 and 2023, and subsequent declines in the following years. The trends suggest that while Scholastic Corporation experienced periods of strong operational efficiency, recent performance indicates a need to address factors impacting its ability to generate consistent returns on the total capital invested.
Peer comparison
May 31, 2025