Cadence Design Systems Inc (CDNS)

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	1,440,136	1,311,336	1,262,749	1,272,807	1,284,819	1,166,667	1,115,390	1,085,015	1,068,297	1,046,995	982,151	892,806	782,437	772,775	750,360	718,563	649,014	573,741	522,432	499,050
Long-term debt	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	6,043,680	4,563,340	4,260,890	3,567,600	3,404,270	3,113,890	2,908,460	2,940,880	2,745,110	2,708,130	2,625,230	2,760,180	2,740,680	2,631,260	2,516,740	2,542,430	2,493,020	2,395,720	2,256,630	2,157,990
Return on total capital		23.83%	28.74%	29.64%	35.68%	37.74%	37.47%	38.35%	36.89%	38.92%	38.66%	37.41%	32.35%	28.55%	29.37%	29.81%	28.26%	26.03%	23.95%	23.15%	23.13%

December 31, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $1,440,136K ÷ ($—K + $6,043,680K)
= 23.83%

Cadence Design Systems Inc has shown a fluctuating trend in its return on total capital over the past few years. The return on total capital increased steadily from March 31, 2020, to June 30, 2022, reaching a peak of 37.41%. This upward trajectory demonstrates the company's ability to effectively utilize its capital resources to generate returns for its investors.

However, there was a slight decline in the return on total capital in the subsequent quarters, with a dip to 23.83% by December 31, 2024. This decrease could indicate a potential decrease in the company's efficiency in generating profits relative to its total invested capital during this period.

Overall, Cadence Design Systems Inc has maintained a generally strong return on total capital throughout the period under review, with some fluctuations in performance. It would be important for stakeholders to closely monitor this metric to assess the company's capital allocation efficiency and profitability going forward.