Certara Inc (CERT)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -32,227 | 36,528 | 13,462 |
| Long-term debt | US$ in thousands | 288,217 | 289,988 | 291,746 |
| Total stockholders’ equity | US$ in thousands | 1,046,840 | 1,079,660 | 1,041,850 |
| Return on total capital | -2.41% | 2.67% | 1.01% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-32,227K ÷ ($288,217K + $1,046,840K)
= -2.41%
Certara Inc's return on total capital has shown a decreasing trend over the past four years. In 2023, the return on total capital was 0.46%, significantly lower than the previous year's 2.37%. Furthermore, the return on total capital was 1.02% in 2021 and -2.18% in 2020. This indicates that Certara Inc's ability to generate profits relative to the total capital employed has been inconsistent, with a particularly poor performance in 2020. The declining trend in return on total capital may suggest inefficiencies or challenges in utilizing the company's capital effectively to generate returns for its investors.
Peer comparison
Dec 31, 2023