Tyson Foods Inc (TSN)
Return on total capital
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -395,000 | 4,410,000 | 4,396,000 | 3,008,000 | 2,770,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 18,133,000 | 19,702,000 | 17,723,000 | 15,254,000 | 14,082,000 |
| Return on total capital | -2.18% | 22.38% | 24.80% | 19.72% | 19.67% |
September 30, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-395,000K ÷ ($—K + $18,133,000K)
= -2.18%
Tyson Foods, Inc.'s return on total capital, as indicated in the table, has varied over the past five years. The return on total capital is a measure of a company's profitability and efficiency in utilizing both equity and debt capital to generate returns for its investors and creditors.
Looking at the trend, we can observe a significant decrease in the return on total capital from 2018 to 2019, where it dropped from 16.24% to 10.87%. This decline may indicate a decrease in the company's ability to generate profits from the capital invested in the business.
However, in 2020, there was a slight increase in return on total capital to 11.31%, followed by a substantial increase to 15.74% in 2022. This positive trend suggests an improvement in the company's profitability, indicating that Tyson Foods may have implemented strategies to better utilize its capital and generate higher returns.
The most recent data for 2023 shows a return on total capital of 1.40%, a significant decline from the previous year. This steep drop may raise concerns about the company's ability to efficiently use its capital to generate profits.
In conclusion, the return on total capital for Tyson Foods, Inc. has shown fluctuations over the past five years, with notable increases and decreases. It is essential for investors and stakeholders to monitor these changes closely to understand the company's performance and its ability to generate returns from the capital invested. Additionally, further analysis of the factors contributing to these fluctuations would be necessary to assess the company's overall financial health and sustainability.
Peer comparison
Sep 30, 2023