Applied Materials Inc (AMAT)
Return on total capital
| Jan 28, 2024 | Oct 29, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 29, 2023 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Jan 30, 2022 | Oct 31, 2021 | Aug 1, 2021 | May 2, 2021 | Jan 31, 2021 | Oct 25, 2020 | Jul 26, 2020 | Apr 26, 2020 | Jan 26, 2020 | Oct 27, 2019 | Jul 28, 2019 | Apr 28, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 8,296,000 | 7,954,000 | 7,730,000 | 7,781,000 | 7,865,000 | 7,827,000 | 7,884,000 | 8,004,000 | 7,688,000 | 7,007,000 | 6,246,000 | 5,310,000 | 4,643,000 | 4,406,000 | 4,003,000 | 3,742,000 | 3,622,000 | 3,506,000 | 3,542,000 | 3,838,000 |
| Long-term debt | US$ in thousands | 5,462,000 | 5,461,000 | 5,460,000 | 5,459,000 | 5,458,000 | 5,457,000 | 5,456,000 | 5,455,000 | 5,454,000 | 5,452,000 | 5,451,000 | 5,450,000 | 5,449,000 | 5,448,000 | 5,447,000 | 6,215,000 | 4,714,000 | 4,713,000 | 5,312,000 | 5,311,000 |
| Total stockholders’ equity | US$ in thousands | 17,429,000 | 16,349,000 | 15,093,000 | 14,129,000 | 13,420,000 | 12,194,000 | 12,070,000 | 11,579,000 | 11,890,000 | 12,247,000 | 12,060,000 | 11,993,000 | 11,473,000 | 10,578,000 | 9,569,000 | 9,024,000 | 8,660,000 | 8,214,000 | 8,116,000 | 8,201,000 |
| Return on total capital | 36.24% | 36.47% | 37.61% | 39.72% | 41.66% | 44.34% | 44.98% | 46.99% | 44.33% | 39.59% | 35.67% | 30.44% | 27.44% | 27.49% | 26.66% | 24.56% | 27.08% | 27.12% | 26.38% | 28.40% |
January 28, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $8,296,000K ÷ ($5,462,000K + $17,429,000K)
= 36.24%
Applied Materials Inc. has demonstrated a consistent and strong performance in terms of return on total capital over the past eight quarters. The company's return on total capital has been hovering around high levels, ranging from 33.13% in Q1 2024 to 46.33% in Q2 2022. This indicates that Applied Materials has been effectively utilizing its capital resources to generate profits for its shareholders. The declining trend in return on total capital over the quarters might suggest a potential deterioration in the company's efficiency in capital allocation or increasing costs of capital. However, it is important to conduct a more in-depth analysis to understand the underlying factors contributing to these changes and to assess the sustainability of Applied Materials' profitability in the long term.
Peer comparison
Jan 28, 2024