Vista Outdoor Inc (VSTO)
Return on total capital
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 50,453 | 107,855 | 646,222 | 291,429 | -131,803 |
| Long-term debt | US$ in thousands | 717,238 | 984,658 | 666,114 | 495,564 | 511,806 |
| Total stockholders’ equity | US$ in thousands | 1,126,300 | 1,131,790 | 1,124,400 | 736,997 | 442,505 |
| Return on total capital | 2.74% | 5.10% | 36.09% | 23.64% | -13.81% |
March 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $50,453K ÷ ($717,238K + $1,126,300K)
= 2.74%
Return on total capital is a key financial metric that evaluates how efficiently a company is using its capital to generate profits. Vista Outdoor Inc's return on total capital has fluctuated over the past five years. In 2024, it stood at 2.74%, indicating a lower level of profitability compared to previous years. This decline in performance suggests that the company may not be effectively utilizing its total capital to generate returns for its shareholders.
In contrast, the return on total capital was significantly higher in 2022 and 2021, reaching 36.09% and 23.64% respectively. These high percentages indicate that during these years, Vista Outdoor Inc was able to generate substantial profits relative to its total invested capital, reflecting strong operational efficiency and profitability.
The negative return on total capital in 2020 (-13.81%) is a concerning indicator suggesting that the company's capital allocation and operational performance may have been suboptimal, resulting in a loss on capital employed during that period.
Overall, Vista Outdoor Inc's return on total capital has shown variability over the past five years, indicating fluctuations in the company's ability to generate profits relative to its total capital base. Further analysis of the company's operational and financial strategies may be necessary to understand the factors driving these fluctuations in return on total capital.
Peer comparison
Mar 31, 2024