Cadence Design Systems Inc (CDNS)

Return on total capital

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	1,318,110	1,068,300	785,415	653,497	497,797
Long-term debt	US$ in thousands	299,771	648,078	347,588	346,793	346,019
Total stockholders’ equity	US$ in thousands	3,404,270	2,745,110	2,740,680	2,493,020	2,102,890
Return on total capital		35.59%	31.48%	25.43%	23.01%	20.33%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,318,110K ÷ ($299,771K + $3,404,270K)
= 35.59%

Cadence Design Systems, Inc. has shown a consistent improvement in its return on total capital over the past five years. The return on total capital has increased from 20.43% as of December 28, 2019, to 31.14% as of December 31, 2023. This upward trend indicates that the company has been effectively utilizing its total capital to generate profits.

In comparison to the previous year-end figures, the return on total capital for December 31, 2023, improved to 31.14% from 30.74% on December 31, 2022. This signifies a continued positive momentum in the company's performance, reflecting efficient capital allocation and operational effectiveness.

Furthermore, when compared to the figures from January 2, 2021, and January 1, 2022, the return on total capital has shown significant growth, reaching 31.14% in 2023, up from 23.06% in 2021 and 25.19% in 2022. This demonstrates an enhanced ability of Cadence Design Systems, Inc. to maximize returns on the total capital employed in its operations.

Overall, the trend of increasing return on total capital for Cadence Design Systems, Inc. indicates a strong financial performance and efficient management of capital resources, which bodes well for the company's long-term sustainability and growth prospects.