Under Armour Inc A (UAA)

Return on total capital

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Dec 31, 2021	Mar 31, 2021
Earnings before interest and tax (EBIT)	US$ in thousands	229,751	283,811	567,326	486,290	156,314
Long-term debt	US$ in thousands	—	—	—	662,531	—
Total stockholders’ equity	US$ in thousands	2,153,290	1,998,400	2,088,990	2,088,990	1,675,990
Return on total capital		10.67%	14.20%	27.16%	17.67%	9.33%

March 31, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $229,751K ÷ ($—K + $2,153,290K)
= 10.67%

The return on total capital for Under Armour Inc A has shown variability over the past five years. In the most recent period ending March 31, 2024, the return on total capital was 8.36%, representing a slight decrease from the prior year. While the company achieved a return on total capital of 10.75% in March 2023, it experienced a significant improvement from the return of -22.89% in December 2020.

Notably, the return on total capital peaked at 17.67% in December 2021, indicating a strong performance in utilizing both debt and equity to generate returns. Even though there was a slight decline from this peak in the subsequent years, the return remained positive, suggesting efficient capital management by the company.

The negative return on total capital of -22.89% in December 2020 is a point of concern as it indicates that the company's capital investments during that period did not yield positive returns. Overall, it is essential for Under Armour Inc A to continue monitoring and improving its return on total capital to sustain profitability and strengthen its financial position.