Apple Inc (AAPL)
Return on total capital
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 117,669,000 | 122,034,000 | 111,852,000 | 69,964,000 | 69,313,000 |
| Long-term debt | US$ in thousands | 95,281,000 | 98,959,000 | 109,106,000 | 98,667,000 | 91,807,000 |
| Total stockholders’ equity | US$ in thousands | 62,146,000 | 50,672,000 | 63,090,000 | 65,339,000 | 90,488,000 |
| Return on total capital | 74.75% | 81.56% | 64.96% | 42.66% | 38.02% |
September 30, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $117,669,000K ÷ ($95,281,000K + $62,146,000K)
= 74.75%
Apple Inc's return on total capital has shown a positive trend over the past five years, indicating the company's increasing efficiency in generating profits from its total capital employed. The return on total capital for the fiscal year ending September 30, 2023, stood at 65.98%, reflecting a slight decline from the previous year. However, when compared to the data from the fiscal year ending September 26, 2019, the company has demonstrated a substantial improvement in utilizing its capital to generate returns.
This consistent increase in return on total capital indicates that Apple has been effectively deploying its capital towards profitable investments and operational activities. This trend is often indicative of effective capital allocation and efficient financial management within the company.
A rising return on total capital is seen as a positive indicator for investors and creditors, as it suggests that the company is utilizing its capital effectively to generate profits. However, it is essential to consider the overall economic and industry conditions in evaluating the significance of this ratio.
In conclusion, Apple Inc's return on total capital has been on a positive trajectory over the past five years, demonstrating the company's ability to generate substantial returns relative to its total capital employed.
Peer comparison
Sep 30, 2023