JM Smucker Company (SJM)
Return on total capital
| Apr 30, 2025 | Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -1,176,400 | 1,260,700 | 142,800 | 1,004,700 | 1,349,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 6,082,600 | 7,693,900 | 7,290,800 | 8,140,100 | 8,124,800 |
| Return on total capital | -19.34% | 16.39% | 1.96% | 12.34% | 16.60% |
April 30, 2025 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-1,176,400K ÷ ($—K + $6,082,600K)
= -19.34%
The analysis of JM Smucker Company's return on total capital over the specified periods reveals significant fluctuations, indicating varying degrees of operational efficiency and investment performance.
In the fiscal year ending April 30, 2021, the company's return on total capital stood at 16.60%, reflecting a relatively strong ability to generate income from its aggregate capital base. This suggests that during this period, the company was effectively deploying its capital to produce positive returns, aligning with a stable and possibly profitable operational environment.
By April 30, 2022, the return declined markedly to 12.34%. This decrease indicates a reduction in capital efficiency, which may be attributable to changes in operational performance, increased investment costs, or strategic shifts that impacted profitability.
The subsequent fiscal year ending April 30, 2023, saw a dramatic decline to 1.96%, signifying a substantial deterioration in the company's capital-generating ability. Such a sharp decrease could be associated with increased expenses, extraordinary losses, or other adverse factors affecting profitability.
However, the trend reversed in the following year, with the return on total capital rebounding to 16.39% as of April 30, 2024. This rebound suggests a significant recovery in operational efficiency or improved profitability, restoring the company's capacity to generate positive returns from its capital investments.
Looking beyond this recovery, the figure for April 30, 2025, drops sharply into negative territory at -19.34%. This indicates that the company incurred losses exceeding its capital base, reflecting an unfavorable financial position and potentially pointing to significant operational challenges, strategic missteps, or one-time detrimental events impacting overall profitability.
Overall, the company's return on total capital exhibits a pattern of volatility, with periods of recovery interspersed with significant declines. The historical trend underscores the importance of analyzing underlying operational factors and strategic initiatives that contributed to these fluctuations, especially considering the recent transition into negative territory.