Advanced Drainage Systems Inc (WMS)
Return on total capital
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | — | 755,615 | 727,282 | 417,061 | 347,929 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 92,652 | 1,261,900 | 977,367 | 1,088,420 | 1,049,700 |
| Return on total capital | 0.00% | 59.88% | 74.41% | 38.32% | 33.15% |
March 31, 2025 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $—K ÷ ($—K + $92,652K)
= 0.00%
Advanced Drainage Systems Inc's return on total capital has exhibited significant fluctuations over the past five years. The trend shows improvements in the return on total capital from 33.15% as of March 31, 2021, to 38.32% as of March 31, 2022, representing a positive trajectory. However, the return on total capital experienced a substantial surge to 74.41% as of March 31, 2023, indicating a sharp increase in profitability.
Despite the strong performance in the previous year, Advanced Drainage Systems Inc's return on total capital declined to 59.88% as of March 31, 2024. This decrease may be attributed to various factors impacting the company's capital efficiency and profitability. Notably, as of March 31, 2025, the return on total capital dropped to 0.00%, indicating a significant decrease or possibly a capital allocation issue.
These fluctuations in return on total capital suggest that Advanced Drainage Systems Inc's capital management and utilization may require further evaluation and optimization. It is essential for the company to assess the drivers behind these variations to sustain and enhance its overall profitability and capital efficiency in the future.