Avanos Medical Inc (AVNS)
Return on total capital
| 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 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -385,800 | 50,700 | 40,100 | 27,500 | 13,900 | 22,000 | 32,900 | 44,900 | 60,200 | 58,300 | 52,000 | 33,600 | 12,000 | -57,700 | -64,300 | -58,600 | -44,900 | -2,400 | -19,300 | -25,500 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 828,500 | 1,229,700 | 1,222,000 | 1,227,900 | 1,236,300 | 1,222,100 | 1,234,800 | 1,298,700 | 1,291,200 | 1,263,500 | 1,251,600 | 1,256,500 | 1,263,900 | 1,261,900 | 1,296,300 | 1,252,600 | 1,256,500 | 1,289,900 | 1,261,600 | 1,256,500 |
| Return on total capital | -46.57% | 4.12% | 3.28% | 2.24% | 1.12% | 1.80% | 2.66% | 3.46% | 4.66% | 4.61% | 4.15% | 2.67% | 0.95% | -4.57% | -4.96% | -4.68% | -3.57% | -0.19% | -1.53% | -2.03% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-385,800K ÷ ($—K + $828,500K)
= -46.57%
Avanos Medical Inc's return on total capital has shown fluctuating performance over the past few years. The ratio was negative in most quarters from March 2020 to March 2022, indicating that the company was not effectively utilizing its capital to generate profits during those periods.
However, there was a notable improvement in the return on total capital starting from December 2022, where the ratio turned positive and continued to increase up to September 2024. This positive trend suggests that Avanos Medical Inc has been able to enhance its efficiency in generating returns on the total capital employed in the business.
The significant negative return on total capital reported in December 2024 (at -46.57%) stands out as an outlier and may raise concerns about the company's financial performance and capital allocation decisions during that quarter. Further investigation into the reasons behind this sharp decrease would be necessary to understand the impact on the company's overall financial health.
Overall, the recent positive trend in the return on total capital indicates an improvement in Avanos Medical Inc's ability to generate profits relative to the total capital invested, but the outlier in December 2024 highlights the importance of monitoring financial ratios consistently to assess the company's performance and financial stability.
Peer comparison
Dec 31, 2024