Broadcom Inc (AVGO)
Return on total capital
| Feb 4, 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 | Nov 1, 2020 | Aug 2, 2020 | May 3, 2020 | Feb 2, 2020 | Nov 3, 2019 | Aug 4, 2019 | May 5, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 14,187,000 | 16,207,000 | 15,953,000 | 15,834,000 | 15,220,000 | 14,225,000 | 12,820,000 | 11,209,000 | 9,790,000 | 8,519,000 | 7,464,000 | 6,346,000 | 5,137,000 | 4,014,000 | 3,542,000 | 3,440,000 | 3,705,000 | 3,604,000 | 4,120,000 | 4,591,000 |
| Long-term debt | US$ in thousands | 73,590,000 | 33,181,000 | 35,072,000 | 35,573,000 | 35,565,000 | 33,014,000 | 40,958,000 | 40,958,000 | 39,205,000 | 41,235,000 | 40,178,000 | 40,160,000 | 41,068,000 | 40,235,000 | 43,201,000 | 45,044,000 | 42,407,000 | 30,011,000 | 34,028,000 | 34,011,000 |
| Total stockholders’ equity | US$ in thousands | 70,284,000 | 23,988,000 | 22,079,000 | 22,007,000 | 23,310,000 | 22,709,000 | 20,903,000 | 20,990,000 | 22,994,000 | 24,989,000 | 24,367,000 | 23,966,000 | 23,999,000 | 23,901,000 | 23,585,000 | 23,970,000 | 24,396,000 | 24,941,000 | 21,503,000 | 22,172,000 |
| Return on total capital | 9.86% | 28.35% | 27.91% | 27.50% | 25.85% | 25.53% | 20.72% | 18.09% | 15.74% | 12.86% | 11.56% | 9.90% | 7.89% | 6.26% | 5.30% | 4.98% | 5.55% | 6.56% | 7.42% | 8.17% |
February 4, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $14,187,000K ÷ ($73,590,000K + $70,284,000K)
= 9.86%
Broadcom Inc's return on total capital has shown fluctuating performance over the analyzed periods. The ratios have ranged from a low of 4.98% to a high of 28.35%. The company experienced an upward trend in the return on total capital from May 2021 to Oct 2023, where it peaked at 28.35%. However, there was a decrease in the ratio in the latest period, Feb 2024, at 9.86%.
The return on total capital indicates the efficiency of the company in generating profits from its total capital employed, comprising both debt and equity. A higher ratio suggests effective utilization of resources to generate returns for the shareholders and creditors.
Although the company experienced fluctuations in the return on total capital, it is essential to assess the trend over a more extended period to gain better insights into Broadcom Inc's overall performance and capital efficiency.
Peer comparison
Feb 4, 2024