Broadcom Inc (AVGO)
Return on total capital
| Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Nov 1, 2020 | Nov 3, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 16,207,000 | 14,225,000 | 8,519,000 | 4,014,000 | 3,444,000 |
| Long-term debt | US$ in thousands | 33,181,000 | 33,014,000 | 41,235,000 | 40,235,000 | 30,011,000 |
| Total stockholders’ equity | US$ in thousands | 23,988,000 | 22,709,000 | 24,989,000 | 23,901,000 | 24,941,000 |
| Return on total capital | 28.35% | 25.53% | 12.86% | 6.26% | 6.27% |
October 29, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $16,207,000K ÷ ($33,181,000K + $23,988,000K)
= 28.35%
Broadcom Inc's return on total capital has shown a consistent positive trend over the past five years, indicating the company's ability to generate returns from its total invested capital. The return on total capital has increased significantly from 7.37% in 2019 to 26.03% in 2023, reflecting substantial improvement in the company's capital utilization efficiency and profitability. This upward trend suggests effective management of both debt and equity capital, leading to higher returns for the company's investors. The consistent growth in return on total capital demonstrates Broadcom's strong operational performance and financial discipline, enhancing confidence in its ability to generate value for its stakeholders.
Peer comparison
Oct 29, 2023