Workday Inc (WDAY)

Return on total capital

		Jan 31, 2025	Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021
Earnings before interest and tax (EBIT)	US$ in thousands	415,000	470,000	-157,597	32,784	-206,328
Long-term debt	US$ in thousands	2,984,000	2,980,000	2,976,000	617,354	691,913
Total stockholders’ equity	US$ in thousands	9,034,000	8,082,000	5,585,000	4,535,080	3,277,830
Return on total capital		3.45%	4.25%	-1.84%	0.64%	-5.20%

January 31, 2025 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $415,000K ÷ ($2,984,000K + $9,034,000K)
= 3.45%

Based on the data provided, Workday Inc's return on total capital has shown fluctuating performance over the past five years. In January 2021, the company reported a negative return on total capital of -5.20%, indicating that the company was not effectively utilizing its total capital to generate profits.

However, there was a subsequent improvement in January 2022 with a return on total capital of 0.64%, suggesting a slight recovery in the company's capital efficiency. The following year, in January 2023, the return on total capital decreased to -1.84%, indicating a decline in the company's ability to generate returns relative to its total capital.

However, there was a notable improvement in January 2024, with a return on total capital of 4.25%, suggesting that Workday Inc was able to enhance its capital efficiency and generate profitable returns. In the most recent data available, as of January 31, 2025, the company maintained a positive return on total capital of 3.45%, indicating continued improvement in utilizing its total capital effectively.

Overall, the trend in Workday Inc's return on total capital shows variability over the years, with a mix of negative and positive returns. It is crucial for investors and stakeholders to monitor this ratio closely to assess the company's capital allocation strategy and its ability to generate returns on the capital employed.