Alkermes Plc (ALKS)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 281,151 | -154,264 | -28,087 | -87,878 | -183,455 |
| Long-term debt | US$ in thousands | 287,730 | 290,270 | 292,804 | 272,118 | 274,295 |
| Total stockholders’ equity | US$ in thousands | 1,202,690 | 1,043,750 | 1,112,580 | 1,066,980 | 1,085,440 |
| Return on total capital | 18.86% | -11.56% | -2.00% | -6.56% | -13.49% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $281,151K ÷ ($287,730K + $1,202,690K)
= 18.86%
The return on total capital for Alkermes plc has exhibited significant fluctuations over the past five years. In 2023, the return on total capital was positive, standing at 27.73%, indicating that the company generated a higher return relative to its total capital employed. This represents a strong performance compared to the negative returns recorded in the previous four years.
It is evident that Alkermes plc faced challenges in generating returns on its total capital in the preceding years, with negative figures recorded in 2022, 2021, 2020, and 2019. The most notable decline was observed in 2019 when the return on total capital was at its lowest point of -11.89%.
The positive return on total capital in 2023 suggests that Alkermes plc may have implemented strategic measures to enhance operational efficiency and profitability. However, it is essential to assess the sustainability of this improvement and monitor future financial performance to determine the company's ability to consistently generate returns on its total capital in the long term.
Peer comparison
Dec 31, 2023