Avnet Inc (AVT)
Return on total capital
| Jun 30, 2025 | Mar 31, 2025 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 496,971 | 599,571 | 635,756 | 711,226 | 917,904 | 1,016,571 | 1,156,409 | 1,289,113 | 1,233,745 | 1,246,824 | 1,205,481 | 1,056,736 | 933,710 | 770,228 | 588,752 | 431,231 | 262,401 | 156,700 | -64,131 | -75,507 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 5,011,500 | 4,884,970 | 4,843,900 | 5,037,740 | 4,925,500 | 4,989,100 | 5,010,380 | 4,822,580 | 4,751,670 | 4,635,600 | 4,429,660 | 4,019,340 | 4,192,760 | 4,256,720 | 4,203,230 | 4,145,600 | 4,084,180 | 3,937,890 | 3,910,730 | 3,777,510 |
| Return on total capital | 9.92% | 12.27% | 13.12% | 14.12% | 18.64% | 20.38% | 23.08% | 26.73% | 25.96% | 26.90% | 27.21% | 26.29% | 22.27% | 18.09% | 14.01% | 10.40% | 6.42% | 3.98% | -1.64% | -2.00% |
June 30, 2025 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $496,971K ÷ ($—K + $5,011,500K)
= 9.92%
The analysis of Avnet Inc.'s return on total capital (ROTC) over the specified period reveals significant fluctuations and a general upward trend during the fiscal years from 2020 through mid-2023, followed by a marked decline in the subsequent periods.
Initially, the ROTC was negative at -2.00% as of September 30, 2020, indicating that the company's operating income was insufficient to cover its total capital costs, reflecting challenges in profitability or capital utilization during that period. The negative figure persisted into December 2020 at -1.64%, although the slight improvement suggested some stabilization.
Starting in the first quarter of 2021, a notable positive shift occurred, with ROTC rebounding to 3.98%. This upward momentum strengthened through subsequent quarters, reaching 6.42% in June 2021, and continued to accelerate, achieving 10.40% in September 2021 and 14.01% at the end of 2021. The upward trajectory persisted into 2022, with ROTC reaching 18.09% by March 2022, 22.27% in June 2022, and peaking at 26.29% in September 2022, indicating substantial improvements in the company's efficiency in generating returns relative to its total capital base.
Throughout 2022 and into early 2023, the ROTC stabilized at high levels, maintaining above 25%, with the quarter ending December 2022 at 27.21%, and remaining relatively steady at 26.90% in March 2023, and 25.96% in June 2023. This sustained high performance suggests effective utilization of capital and strong profitability during that period.
However, starting in the third quarter of 2023, a downward trend is evident, with ROTC dipping to 26.73%, then falling more sharply to 23.08% by the end of 2023. The decline persisted into 2024, reaching 20.38% in March, and continuing downward to 18.64% in June, 14.12% in September, and further to 13.12% by December 2024. The decrease continued into the first half of 2025, with ROTC recorded at 12.27% in March and declining to 9.92% in June.
Overall, the data indicates that Avnet Inc. experienced a recovery from negative returns in 2020 to robust positive returns through 2022 and early 2023, signifying improved operational efficiency and effective capital management during that period. The subsequent decline beginning in late 2023 suggests some reduction in profitability or efficiency, which could be attributable to market conditions, operational challenges, or shifts in capital investment effectiveness. The trend warrants further investigation for underlying causes affecting the company's long-term capital productivity.
Peer comparison
Jun 30, 2025