Toro Co (TTC)
Return on total capital
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 459,200 | 588,284 | 528,477 | 440,226 | 350,968 |
| Long-term debt | US$ in thousands | 1,031,500 | 990,800 | 691,242 | 691,250 | 620,899 |
| Total stockholders’ equity | US$ in thousands | 1,510,900 | 1,351,700 | 1,151,130 | 1,114,830 | 859,578 |
| Return on total capital | 18.06% | 25.11% | 28.68% | 24.37% | 23.71% |
October 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $459,200K ÷ ($1,031,500K + $1,510,900K)
= 18.06%
Toro Co.'s return on total capital has exhibited fluctuations over the past five years, standing at 22.89% in 2023, 24.58% in 2022, 28.13% in 2021, 22.37% in 2020, and 20.83% in 2019. These figures indicate the company's ability to generate earnings in relation to its total capital employed. Although there was a decrease in the return on total capital from 2021 to 2023, the company's performance remained relatively strong, with returns consistently exceeding 20% over the period. This suggests effective capital allocation and utilization by the company, as it has been able to generate significant earnings relative to the total capital invested in its operations. It would be beneficial to assess the company's financial and operational strategies to understand the factors behind the fluctuations in return on total capital.