Applied Materials Inc (AMAT)
Return on total capital
| Oct 31, 2024 | Oct 27, 2024 | Oct 31, 2023 | Oct 29, 2023 | Oct 31, 2022 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 7,867,000 | 7,867,000 | 7,654,000 | 7,954,000 | 7,784,000 |
| Long-term debt | US$ in thousands | — | 5,460,000 | — | 5,461,000 | — |
| Total stockholders’ equity | US$ in thousands | 19,001,000 | 19,001,000 | 16,349,000 | 16,349,000 | 12,194,000 |
| Return on total capital | 41.40% | 32.16% | 46.82% | 36.47% | 63.83% |
October 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $7,867,000K ÷ ($—K + $19,001,000K)
= 41.40%
Applied Materials Inc's return on total capital has fluctuated over the past few years. In October 2022, the return on total capital was strong at 63.83%, indicating that the company was efficient in generating profits from its total capital employed. However, there was a decline in the return on total capital to 36.47% by October 2023. This decrease may suggest a potential decrease in profitability or less efficient utilization of capital during that period.
The return on total capital improved to 46.82% by October 2023, showcasing a recovery in the company's ability to generate returns on its total capital. Subsequently, there was a slight decrease in the return on total capital to 32.16% in October 2024, which could be a result of various factors affecting the company's financial performance during that period.
By the end of October 2024, the return on total capital rose to 41.40%. This increase indicates that Applied Materials Inc was able to enhance its efficiency in utilizing total capital to generate returns.
Overall, while the return on total capital has shown fluctuations, Applied Materials Inc has demonstrated the ability to adapt and improve its efficiency in generating profits from the total capital employed over the analyzed period.
Peer comparison
Oct 31, 2024