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.
Peer comparison
Dec 31, 2023