Advanced Micro Devices Inc (AMD)
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 | 614,000 | 1,286,000 | 3,709,000 | 1,327,000 | 466,000 |
| Long-term debt | US$ in thousands | 1,717,000 | 2,467,000 | 1,000 | 330,000 | 486,000 |
| Total stockholders’ equity | US$ in thousands | 55,892,000 | 54,750,000 | 7,497,000 | 5,837,000 | 2,827,000 |
| Return on total capital | 1.07% | 2.25% | 49.47% | 21.52% | 14.07% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $614,000K ÷ ($1,717,000K + $55,892,000K)
= 1.07%
Advanced Micro Devices Inc's return on total capital has fluctuated over the past five years, ranging from a low of 1.07% in 2023 to a high of 49.47% in 2021. The sharp decline from 2021 to 2023 indicates a significant decrease in the company's ability to generate returns relative to its total capital employed.
The decreasing trend in return on total capital from 2021 to 2023 suggests that the company may be facing challenges in efficiently utilizing its capital to generate profits. Investors and analysts may need to further investigate the reasons behind this decline, such as changes in the company's financial structure, operational inefficiencies, or external market conditions impacting profitability.
While the return on total capital in 2023 is relatively low compared to previous years, it is essential to consider industry benchmarks and peer comparisons to assess Advanced Micro Devices Inc's performance in a broader context. Further analysis of the company's financial statements and business operations can provide valuable insights into the factors driving its return on total capital and potential areas for improvement.
Peer comparison
Dec 31, 2023