Aspen Technology Inc (AZPN)

Return on total capital

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022
Earnings before interest and tax (EBIT)	US$ in thousands	-89,540	-183,065	22,272
Long-term debt	US$ in thousands	—	—	—
Total stockholders’ equity	US$ in thousands	12,812,900	13,070,900	13,169,400
Return on total capital		-0.70%	-1.40%	0.17%

June 30, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-89,540K ÷ ($—K + $12,812,900K)
= -0.70%

Aspen Technology Inc's return on total capital has been fluctuating over the past three years. In June 2022, the company had a return on total capital of 0.17%, indicating that for every dollar of total capital employed, the company generated a profit of 0.17 cents. However, this metric deteriorated in June 2023 to -1.40%, reflecting a negative return on total capital, which suggests that the company's capital allocation and utilization were not generating profits at that time.

The trend continued in June 2024, with the return on total capital decreasing further to -0.70%. This indicates that Aspen Technology Inc's ability to generate profit from its total capital remained challenged in the most recent period. Overall, the negative values for return on total capital in the last two years suggest inefficiencies in the company's capital management and operational performance, which may warrant further investigation and strategic adjustments by the company's management to improve profitability and efficiency.