Avanos Medical Inc (AVNS)
Return on total capital
| 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 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -43,400 | -21,100 | -10,500 | 72,900 | 78,400 | 71,400 | 57,200 | 32,600 | 10,600 | -63,500 | -67,000 | -62,000 | -47,300 | -2,400 | -19,300 | -25,500 | -49,000 | -52,200 | -26,200 | 26,600 |
| Long-term debt | US$ in thousands | — | — | — | — | 226,300 | — | — | — | 130,000 | 145,000 | 165,000 | 175,000 | 180,000 | — | — | — | 248,100 | 247,900 | 247,800 | 247,900 |
| Total stockholders’ equity | US$ in thousands | 1,236,300 | 1,222,100 | 1,234,800 | 1,298,700 | 1,291,200 | 1,263,500 | 1,259,000 | 1,262,800 | 1,270,600 | 1,267,100 | 1,301,700 | 1,257,400 | 1,262,100 | 1,289,900 | 1,261,600 | 1,256,500 | 1,272,600 | 1,266,900 | 1,276,900 | 1,280,100 |
| Return on total capital | -3.51% | -1.73% | -0.85% | 5.61% | 5.17% | 5.65% | 4.54% | 2.58% | 0.76% | -4.50% | -4.57% | -4.33% | -3.28% | -0.19% | -1.53% | -2.03% | -3.22% | -3.45% | -1.72% | 1.74% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-43,400K ÷ ($—K + $1,236,300K)
= -3.51%
To analyze Avanos Medical Inc's return on total capital based on the provided data, we observe a fluctuating trend over the past eight quarters. The return on total capital has ranged from a low of 1.25% in Q4 2023 to a high of 5.09% in Q4 2022.
The return on total capital indicates the efficiency of the company in generating returns from the total capital employed in its operations. A declining trend in this ratio could suggest a decrease in the company's ability to generate profits relative to its invested capital.
In this case, the return on total capital has shown a general downward trend over the last two quarters, decreasing from 4.78% in Q1 2023 to 1.25% in Q4 2023. This decline may raise concerns about the company's capital utilization efficiency and profitability.
It is important for Avanos Medical Inc to closely monitor and address the factors influencing its return on total capital to ensure sustainable and profitable operations in the future. Further investigation into the underlying reasons for the fluctuating trend in this ratio could provide insights for strategic decision-making and performance improvement.
Peer comparison
Dec 31, 2023