Altair Engineering Inc (ALTR)

Return on total capital

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	38,466	18,735	-23,836	11,777	13,630
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	857,189	711,331	569,736	613,981	379,370
Return on total capital		4.49%	2.63%	-4.18%	1.92%	3.59%

December 31, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $38,466K ÷ ($—K + $857,189K)
= 4.49%

Altair Engineering Inc's return on total capital has exhibited fluctuations over the past five years. In December 2020, the return on total capital stood at 3.59%, indicating a moderate level of profitability generated from the company's total capital. However, by December 2021, there was a decline in the return on total capital to 1.92%, suggesting a decrease in the efficiency of capital utilization.

The trend continued into December 2022, where Altair Engineering Inc experienced a negative return on total capital of -4.18%, indicating that the company's capital utilization led to a loss during that period. However, the company managed to improve its performance in December 2023, achieving a return on total capital of 2.63%. This signals a recovery in capital efficiency compared to the previous year.

By December 2024, Altair Engineering Inc's return on total capital increased to 4.49%, reflecting a significant improvement in capital utilization and indicating that the company was able to generate higher returns relative to the invested capital.

Overall, Altair Engineering Inc's return on total capital experienced variability over the five-year period, showing a mix of positive and negative performance. It is important for the company to continue monitoring and improving its capital utilization to enhance profitability and generate sustainable returns for its investors.