Certara Inc (CERT)
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 | -5,877 | -19,575 | -60,433 | -39,693 | -32,227 | -12,100 | 49,320 | 41,941 | 40,971 | 42,072 | 28,254 | 26,512 | 25,045 | -44,110 | -36,500 | -27,903 | -24,885 | 33,010 | 33,530 | 25,076 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,058,660 | 1,053,400 | 1,043,400 | 1,054,360 | 1,046,840 | 1,051,750 | 1,097,170 | 1,085,060 | 1,079,660 | 1,054,400 | 1,048,380 | 1,048,400 | 1,041,850 | 971,320 | 834,510 | 827,267 | 822,132 | 497,538 | 492,190 | 492,048 |
| Return on total capital | -0.56% | -1.86% | -5.79% | -3.76% | -3.08% | -1.15% | 4.50% | 3.87% | 3.79% | 3.99% | 2.70% | 2.53% | 2.40% | -4.54% | -4.37% | -3.37% | -3.03% | 6.63% | 6.81% | 5.10% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-5,877K ÷ ($—K + $1,058,660K)
= -0.56%
Return on total capital is a key financial ratio that measures a company's ability to generate profits from its total invested capital. For Certara Inc, the return on total capital fluctuated over the period from March 31, 2020, to December 31, 2024.
The trend in return on total capital shows variability with some periods of positive returns and others of negative returns. The ratio started at 5.10% in March 2020, reached a peak of 6.81% in June 2020, and then declined to negative levels by December 2020, indicating that the company was not efficiently utilizing its total capital to generate profits during that period.
The return on total capital continued to be negative until June 2022, showing a challenging financial performance. However, from September 2022 onwards, there was a gradual improvement in the ratio, reaching a positive value of 4.50% in June 2023. This suggests that Certara Inc enhanced its capital efficiency and profitability during this time frame.
Despite the improvement, the company experienced fluctuations in return on total capital in the subsequent periods, with some quarters showing negative returns again. By December 31, 2024, the return on total capital had improved to -0.56%, indicating optimization in capital utilization but still room for enhancement.
In conclusion, Certara Inc's return on total capital experienced fluctuations over the analyzed period, reflecting varying levels of capital efficiency and profitability. The company showed efforts to improve its performance, but there is a need for consistent and sustainable growth to maximize returns on its total capital in the future.
Peer comparison
Dec 31, 2024