CEVA Inc (CEVA)

Return on total capital

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-16,571	-22,080	-21,722	-15,724	-10,463	-611	3,442	5,306	3,508	4,359	2,667	-430	-763	288	19	-655	-1,924	-3,210	-791	-1,269
Long-term debt	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	264,341	256,700	258,584	259,870	258,871	252,297	273,715	278,079	276,732	269,742	265,016	261,649	260,889	256,571	252,381	249,272	251,157	249,360	244,645	245,312
Return on total capital		-6.27%	-8.60%	-8.40%	-6.05%	-4.04%	-0.24%	1.26%	1.91%	1.27%	1.62%	1.01%	-0.16%	-0.29%	0.11%	0.01%	-0.26%	-0.77%	-1.29%	-0.32%	-0.52%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-16,571K ÷ ($—K + $264,341K)
= -6.27%

Ceva Inc.'s return on total capital has been trending downwards over the past eight quarters, indicating a declining efficiency in generating returns relative to the total capital invested in the business. The negative values in the most recent quarters (Q4 2023, Q3 2023, and Q2 2023) suggest that the company's capital utilization and profitability have deteriorated significantly. Furthermore, the return on total capital has been consistently below zero since Q4 2022, signaling ongoing challenges in generating adequate returns on the capital employed.

This declining trend in return on total capital raises concerns about Ceva Inc.'s operational performance and may indicate inefficiencies or underperformance in the utilization of its capital resources. It is essential for the company to address these issues promptly to improve its overall financial performance and enhance shareholder value.