Cognex Corporation (CGNX)
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 | 130,702 | 172,310 | 181,696 | 181,662 | 246,229 | 248,412 | 295,936 | 323,376 | 315,101 | 317,666 | 326,754 | 228,031 | 170,529 | 129,051 | 75,508 | 133,406 | 142,602 | 142,602 | 142,602 | 142,602 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,504,750 | 1,488,600 | 1,480,460 | 1,446,330 | 1,438,390 | 1,389,220 | 1,389,980 | 1,358,740 | 1,430,090 | 1,492,960 | 1,429,450 | 1,357,000 | 1,262,200 | 1,505,830 | 1,376,480 | 1,327,490 | 1,355,710 | 1,239,220 | 1,191,640 | 1,188,860 |
| Return on total capital | 8.69% | 11.58% | 12.27% | 12.56% | 17.12% | 17.88% | 21.29% | 23.80% | 22.03% | 21.28% | 22.86% | 16.80% | 13.51% | 8.57% | 5.49% | 10.05% | 10.52% | 11.51% | 11.97% | 11.99% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $130,702K ÷ ($—K + $1,504,750K)
= 8.69%
Return on total capital is an important financial metric that indicates how efficiently a company generates profits from its total capital employed. Cognex Corp.'s return on total capital has shown a fluctuating trend over the past eight quarters. The ratio ranged from a low of 8.15% in Q4 2023 to a high of 23.80% in Q1 2022.
The decreasing trend in return on total capital from Q1 2022 to Q4 2023 raises concerns about the company's ability to efficiently utilize its total capital. This may indicate either a decrease in profitability or an increase in the amount of capital employed without a proportional increase in earnings.
It is important for investors and stakeholders to closely monitor Cognex Corp.'s return on total capital to ensure that the company is effectively managing its capital resources to generate sufficient returns. Further analysis of the company's financial performance and strategic decisions may be required to determine the underlying reasons for the fluctuations in this ratio.
Peer comparison
Dec 31, 2023