Arrowhead Pharmaceuticals Inc (ARWR)

Return on total capital

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	-601,080	-184,165	-172,278	-140,846	-93,159
Long-term debt	US$ in thousands	393,183	0	—	—	—
Total stockholders’ equity	US$ in thousands	185,444	271,343	398,520	408,822	461,779
Return on total capital		-103.88%	-67.87%	-43.23%	-34.45%	-20.17%

September 30, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-601,080K ÷ ($393,183K + $185,444K)
= -103.88%

Arrowhead Pharmaceuticals Inc's return on total capital has been declining over the past five years, with a significant decrease from -20.17% in Sep 30, 2020 to -103.88% in Sep 30, 2024. This indicates that the company's ability to generate profits from its total capital employed has worsened over time. The negative values suggest that the company's capital investments are not yielding returns and may potentially be eroding capital. This trend raises concerns about the company's operational efficiency and profitability. Further analysis and actions may be required to address these declining returns and improve the company's overall financial performance.