Ciena Corp (CIEN)
Return on total capital
| Jan 27, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Jan 31, 2019 | Jul 31, 2018 | Apr 30, 2018 | Jan 31, 2018 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 389,769 | 411,679 | 396,109 | 335,181 | 283,054 | 229,555 | 287,641 | 409,486 | 482,604 | 493,588 | 449,581 | 488,531 | 480,999 | 458,521 | 449,018 | 294,112 | 187,600 | 191,855 | 189,275 | 210,815 |
| Long-term debt | US$ in thousands | 1,543,120 | 1,543,410 | 1,543,900 | 1,546,400 | 1,547,500 | 1,061,120 | 1,062,450 | 1,062,180 | 1,065,260 | 670,355 | 671,855 | — | 674,856 | 676,356 | — | — | 684,939 | 586,505 | 585,538 | 584,601 |
| Total stockholders’ equity | US$ in thousands | 2,923,500 | 2,848,360 | 2,947,010 | 2,908,650 | 2,838,300 | 2,712,860 | 2,667,740 | 2,782,420 | 2,814,790 | 3,020,020 | 2,924,240 | 2,693,260 | 2,586,510 | 2,509,600 | 2,428,870 | 2,240,580 | 2,054,300 | 1,778,950 | 1,744,120 | 1,756,140 |
| Return on total capital | 8.73% | 9.37% | 8.82% | 7.52% | 6.45% | 6.08% | 7.71% | 10.65% | 12.44% | 13.38% | 12.50% | 18.14% | 14.75% | 14.39% | 18.49% | 13.13% | 6.85% | 8.11% | 8.12% | 9.01% |
January 27, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $389,769K ÷ ($1,543,120K + $2,923,500K)
= 8.73%
Return on total capital is a key financial ratio that indicates the efficiency and profitability of a company in generating returns from its total invested capital. Looking at the data provided for CIENA Corp. over the past eight quarters, we can observe fluctuations in their return on total capital ratio.
In Q2 2022, the return on total capital was at its highest, standing at 11.28%. This indicated that during this period, CIENA Corp. was effectively utilizing its total invested capital to generate returns. However, this figure declined in subsequent quarters, reaching its lowest at 6.49% in Q1 2023. This decrease suggests a potential dip in the company's efficiency in generating profits relative to its total invested capital.
The return on total capital ratio showed some improvement in the following quarters, with a steady increase leading up to Q4 2023. During Q4 2023, the return on total capital was recorded at 8.64%, demonstrating a slight improvement compared to the previous quarter.
Overall, CIENA Corp.'s return on total capital has shown fluctuations over the analyzed period, with peaks and troughs in performance. It is essential for the company to consistently monitor and enhance its efficiency in utilizing its total capital to ensure sustainable profitability in the long term.
Peer comparison
Jan 27, 2024