Williams-Sonoma Inc (WSM)
Return on total capital
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,244,190 | 1,498,420 | 1,453,120 | 910,697 | 465,874 |
| Long-term debt | US$ in thousands | — | — | — | 0 | — |
| Total stockholders’ equity | US$ in thousands | 2,127,860 | 1,701,050 | 1,664,210 | 1,651,180 | 1,235,860 |
| Return on total capital | 58.47% | 88.09% | 87.32% | 55.15% | 37.70% |
January 28, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,244,190K ÷ ($—K + $2,127,860K)
= 58.47%
Williams-Sonoma Inc's return on total capital has shown some fluctuation over the past five years. The company experienced a notable decrease in return on total capital from 88.09% in Jan 29, 2023, to 55.15% in Jan 31, 2021, before rebounding to 58.47% in Jan 28, 2024. This indicates that the company's ability to generate profits from its total capital has varied over time.
While the return on total capital has been relatively high, ranging from 37.70% to 88.09% over the period analyzed, investors should pay attention to the downward trend in recent years. It may be important for Williams-Sonoma Inc to analyze the factors contributing to these fluctuations in order to maintain or improve its return on total capital in the future.
Overall, Williams-Sonoma Inc's return on total capital reflects its efficiency in generating profits relative to the total capital employed in its operations. Investors and analysts should continue monitoring this ratio to assess the company's financial performance and sustainability.