Digi International Inc (DGII)

Return on total capital

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	50,154	38,318	10,384	11,055	11,247
Long-term debt	US$ in thousands	188,051	222,448	45,799	58,980	—
Total stockholders’ equity	US$ in thousands	540,488	501,513	472,517	371,500	348,978
Return on total capital		6.88%	5.29%	2.00%	2.57%	3.22%

September 30, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $50,154K ÷ ($188,051K + $540,488K)
= 6.88%

Digi International, Inc.'s return on total capital has shown a consistent upward trend over the past five years. The return on total capital increased from 2.86% in 2019 to 6.73% in 2023. This indicates that the company has been able to generate a higher return relative to the total capital employed in its operations.

This improvement suggests that Digi International has effectively utilized its capital to generate profits. A rising return on total capital is generally a positive indicator of the company's operational efficiency and its ability to create value for its stakeholders. It also reflects management's effectiveness in utilizing the company's resources to generate profits for shareholders. Additionally, this trend may indicate improving operational performance and financial management within the company.