Catalent Inc (CTLT)
Return on total capital
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -749,000 | -163,000 | 730,000 | 828,000 | 394,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 3,604,000 | 4,611,000 | 4,775,000 | 3,915,000 | 2,899,000 |
| Return on total capital | -20.78% | -3.54% | 15.29% | 21.15% | 13.59% |
June 30, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-749,000K ÷ ($—K + $3,604,000K)
= -20.78%
Catalent Inc's return on total capital has fluctuated over the past five years. In 2020, the company achieved a return of 13.59%, which increased significantly to 21.15% in 2021, indicating improved efficiency in generating returns from its total capital. However, this positive trend was reversed in 2022, with the return decreasing to 15.29%. Subsequently, in 2023 and 2024, Catalent Inc experienced declining returns, with -3.54% and -20.78%, respectively.
The negative return on total capital in 2024 is concerning, as it indicates that the company may not be effectively utilizing its total capital to generate profits. It suggests potential inefficiencies or challenges in the company's operations or investments. Further analysis of the company's financial performance and operational strategies would be necessary to identify the underlying reasons for the deteriorating return on total capital.
Peer comparison
Jun 30, 2024