Scholastic Corporation (SCHL)
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 | 15,900 | 10,000 | -7,400 | 28,100 | 15,600 | 63,900 | 71,500 | 61,300 | 97,900 | 56,200 | 63,700 | 32,100 | 57,700 | 13,500 | 26,600 | 14,500 | 300 | -93,425 | -95,925 | -41,825 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 946,500 | 941,300 | 986,000 | 957,300 | 1,018,100 | 997,600 | 1,079,100 | 1,054,600 | 1,164,500 | 1,149,900 | 1,216,500 | 1,166,300 | 1,218,400 | 1,185,300 | 1,210,000 | 1,148,300 | 1,182,300 | 1,176,800 | 1,187,900 | 1,147,400 |
| Return on total capital | 1.68% | 1.06% | -0.75% | 2.94% | 1.53% | 6.41% | 6.63% | 5.81% | 8.41% | 4.89% | 5.24% | 2.75% | 4.74% | 1.14% | 2.20% | 1.26% | 0.03% | -7.94% | -8.08% | -3.65% |
May 31, 2025 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $15,900K ÷ ($—K + $946,500K)
= 1.68%
The analysis of Scholastic Corporation's return on total capital (ROTC) over the specified periods reveals a generally improving trend with notable fluctuations. Initially, during the fiscal periods ending August 31, 2020, and November 30, 2020, the company experienced negative ROTC values of -3.65% and -8.08%, indicating that the company's operations and asset utilization were not generating sufficient returns to cover its cost of capital at that time. These negative figures suggest the firm was underperforming and potentially facing challenges in generating profitability from its total capital base.
Moving into early 2021, the ROTC remained negative, albeit slightly improved at -7.94% by February 2021. However, a turning point occurs in May 2021 when the ROTC approaches zero at 0.03%, signaling the onset of a phase where operational efficiencies and revenue generation started inching toward positive territory.
Throughout the subsequent fiscal periods, a steady upward trend is observed. By August 2021, the ROTC turns positive at 1.26%, further strengthening to 2.20% in November 2021, and continues to grow, reaching 4.74% by May 2022. This trend indicates increased effectiveness in utilizing total capital to generate earnings. Additionally, the ROTC remains positive and continues to improve, reaching a peak of 8.41% in May 2023, signifying strong capital efficiency and profitability.
Following this peak, the ratio experiences some fluctuation but generally remains in positive territory, with a value of 5.81% in August 2023 and maintaining above 5% in subsequent periods. Notably, the later periods show some volatility, with the ROTC falling to 2.94% in August 2024, dipping into negative territory at -0.75% in November 2024, and then recovering to positive levels at 1.06% and 1.68% in the following periods through May 2025.
In summary, the data indicates that Scholastic Corporation transitioned from negative returns on total capital during the early pandemic period, reflecting operational struggles, to a phase of consistent positive returns starting in mid-2021. The company has demonstrated improved efficiency in leveraging its total capital to generate earnings, though recent fluctuations suggest periods of volatility that merit ongoing analysis. Overall, the trend points to a strengthening financial performance in terms of capital utilization over the covered periods.
Peer comparison
May 31, 2025