Signet Jewelers Ltd (SIG)
Return on total capital
| Feb 3, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Feb 1, 2020 | Nov 2, 2019 | Aug 3, 2019 | May 4, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 621,500 | 574,100 | 606,500 | 700,700 | 464,700 | 497,000 | 557,100 | 598,200 | 901,300 | 791,700 | 725,600 | 410,600 | -57,700 | -134,900 | -207,500 | -140,200 | 157,000 | -148,900 | -172,700 | -216,300 |
| Long-term debt | US$ in thousands | 0 | 0 | 0 | 147,500 | 147,400 | 147,300 | 147,200 | 147,100 | 147,100 | 147,000 | 146,900 | 146,800 | 146,700 | 1,036,200 | 1,336,100 | 1,336,000 | 515,900 | 788,800 | 628,200 | 639,000 |
| Total stockholders’ equity | US$ in thousands | 2,166,500 | 1,572,200 | 1,614,100 | 1,581,500 | 1,578,600 | 1,358,100 | 1,367,900 | 1,256,800 | 1,564,000 | 1,534,600 | 1,555,500 | 1,320,600 | 1,190,300 | 915,900 | 916,400 | 983,800 | 1,222,600 | 1,050,700 | 1,088,200 | 1,161,400 |
| Return on total capital | 28.69% | 36.52% | 37.58% | 40.53% | 26.92% | 33.01% | 36.77% | 42.61% | 52.67% | 47.08% | 42.62% | 27.98% | -4.32% | -6.91% | -9.21% | -6.04% | 9.03% | -8.09% | -10.06% | -12.01% |
February 3, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $621,500K ÷ ($0K + $2,166,500K)
= 28.69%
Return on total capital is a key financial ratio that indicates the profitability of a company in generating returns from its total invested capital. Looking at the historical data for Signet Jewelers Ltd, the return on total capital has shown fluctuating performance over the past several quarters.
Starting from May 2020, the company experienced negative returns on total capital, indicating that the company was not effectively utilizing its capital to generate profits during that period. However, the trend reversed, and from May 2021 to Jan 2024, the return on total capital improved significantly, reaching its peak at 52.67% in Jan 2022.
The consistent improvement in the return on total capital from Jan 2021 to Jan 2022 reflects the company's ability to efficiently allocate its resources and generate higher profits relative to the capital invested. However, there was a slight decline in the ratio in the subsequent quarters, with fluctuations in between, reflecting some variability in the company's profitability performance.
Overall, the trend in Signet Jewelers Ltd's return on total capital indicates periods of strong profitability followed by fluctuations. It is essential for the company to maintain a consistent and efficient use of its capital to sustain and enhance its profitability levels in the long run.