Cognizant Technology Solutions Corp Class A (CTSH)
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 | 2,835,000 | 2,793,000 | 2,884,000 | 3,051,000 | 3,039,000 | 3,057,000 | 2,973,000 | 2,907,000 | 2,839,000 | 2,570,000 | 2,466,000 | 2,272,000 | 2,120,000 | 2,224,000 | 2,258,000 | 2,436,000 | 2,511,000 | 2,760,000 | 2,764,000 | 2,713,000 |
| Long-term debt | US$ in thousands | 606,000 | 614,000 | 622,000 | 630,000 | 638,000 | 636,000 | 608,000 | 617,000 | 626,000 | 636,000 | 645,000 | 654,000 | 663,000 | 2,412,000 | 2,421,000 | 2,430,000 | 700,000 | 709,000 | 718,000 | 727,000 |
| Total stockholders’ equity | US$ in thousands | 13,227,000 | 12,882,000 | 12,903,000 | 12,661,000 | 12,309,000 | 11,958,000 | 11,950,000 | 11,973,000 | 11,991,000 | 11,546,000 | 11,205,000 | 11,037,000 | 10,836,000 | 11,140,000 | 10,972,000 | 10,613,000 | 11,022,000 | 10,702,000 | 10,557,000 | 11,136,000 |
| Return on total capital | 20.49% | 20.70% | 21.32% | 22.96% | 23.47% | 24.27% | 23.67% | 23.09% | 22.50% | 21.10% | 20.81% | 19.43% | 18.44% | 16.41% | 16.86% | 18.68% | 21.42% | 24.19% | 24.51% | 22.87% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $2,835,000K ÷ ($606,000K + $13,227,000K)
= 20.49%
Cognizant Technology Solutions Corp. has maintained a consistent return on total capital over the past eight quarters, ranging from 20.99% to 23.97%. The company's return on total capital peaked at 23.97% in Q3 2022 before gradually declining in subsequent quarters. Despite the slight fluctuations, the return on total capital remains at a healthy level, averaging around 22% over the period analyzed. This indicates that Cognizant is efficiently utilizing its capital to generate profits for its shareholders. It would be advisable to continue monitoring this ratio to ensure that the company maintains its financial performance and capital efficiency in the future.
Peer comparison
Dec 31, 2023