Digi International Inc (DGII)

Return on total capital

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	38,273	50,154	38,318	10,384	11,055
Long-term debt	US$ in thousands	123,185	188,051	222,448	45,799	58,980
Total stockholders’ equity	US$ in thousands	581,035	540,488	501,513	472,517	371,500
Return on total capital		5.43%	6.88%	5.29%	2.00%	2.57%

September 30, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $38,273K ÷ ($123,185K + $581,035K)
= 5.43%

Digi International Inc's return on total capital has fluctuated over the past five years. The return on total capital was 5.43% for the fiscal year ending September 30, 2024, which represents a slight decrease from the previous year's figure of 6.88%. This suggests that the company's efficiency in generating profits from the total capital employed may have declined.

Comparing the current year's return on total capital to the figures from two years prior, we see improvement as the return on total capital was 5.29% in September 2022 and 2.00% in September 2021. This indicates that the company has been able to enhance its profitability relative to the total capital invested over the last two years.

However, the return on total capital in September 2020 was slightly higher at 2.57% compared to the most recent year, indicating that the company may have experienced some challenges in maintaining or further increasing profitability in the most recent fiscal year.

Overall, the fluctuations in Digi International Inc's return on total capital over the past five years suggest varying levels of efficiency in utilizing its total capital to generate profits. It will be important to further analyze the company's financial performance and strategies to understand the factors influencing these fluctuations and to assess the sustainability of its profitability.