Alpha and Omega Semiconductor Ltd (AOSL)

Return on total capital

		Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-15,152	-16,365	-13,389	-3,756	57	-3,841	5,175	21,328	37,433	83,067	102,902	102,317	106,261	92,825	78,698	64,076	40,386	13,971	-2,989	-13,937
Long-term debt	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	886,291	902,580	895,272	891,607	888,937	894,558	885,279	883,919	887,258	899,674	885,469	854,093	826,901	793,990	400,871	373,205	345,287	331,718	309,108	293,689
Return on total capital		-1.71%	-1.81%	-1.50%	-0.42%	0.01%	-0.43%	0.58%	2.41%	4.22%	9.23%	11.62%	11.98%	12.85%	11.69%	19.63%	17.17%	11.70%	4.21%	-0.97%	-4.75%

March 31, 2025 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-15,152K ÷ ($—K + $886,291K)
= -1.71%

The analysis of Alpha and Omega Semiconductor Ltd's return on total capital over the specified period reveals significant fluctuations and a marked overall decline. Initially, during the fiscal year ending June 30, 2020, the company experienced a negative return of -4.75%, indicating that the company's operations were not generating adequate returns relative to its total capital at that time. This negative trend persisted into September 2020, with a marginal improvement to -0.97%, but remained below the breakeven point.

A notable turning point occurred by December 31, 2020, when the return turned positive at 4.21%, suggesting an improvement in operational performance and capital efficiency. This positive momentum continued substantially into 2021, with the return reaching 11.70% on March 31, 2021, and further escalating to 17.17% by June 30, 2021. The trend persisted with values of 19.63% at September 30, 2021, and a sustained positive return of 11.69% at December 31, 2021.

Throughout 2022, the return remained positive, although it showed a gradual decline from 12.85% in March to 9.23% by December 31, 2022. This downward trend continued into 2023, with the return decreasing sharply to 4.22% in March and further diminishing to 2.41% in June. By September and December 2023, the return approached near zero (-0.58% and -0.43%, respectively), indicating declining profitability and diminishing efficiency in capital utilization.

The most recent data extending into 2024 and 2025 demonstrates a continuation of this negative trajectory, with return values of -1.50% on September 30, 2024, and -1.71% at March 31, 2025. The persistent negative returns over this period reflect ongoing challenges in generating adequate profits relative to total capital employed, potentially indicating underlying operational or strategic issues affecting the company’s profitability and efficiency.

Overall, the historical data depict an initial recovery and period of strong performance beginning in late 2020 through 2021, followed by a sustained decline that has persisted into early 2025, culminating in near-zero and negative return levels. This pattern indicates a significant deterioration in the company's ability to generate returns on its total capital over the analyzed timeframe.