Diodes Incorporated (DIOD)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 53,530 | 250,571 | 404,260 | 322,031 | 131,558 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,795,300 | 1,740,740 | 1,513,640 | 1,237,240 | 963,820 |
| Return on total capital | 2.98% | 14.39% | 26.71% | 26.03% | 13.65% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $53,530K ÷ ($—K + $1,795,300K)
= 2.98%
Diodes Incorporated has shown fluctuations in its return on total capital over the analyzed period. The return on total capital increased significantly from 13.65% as of December 31, 2020, to 26.03% as of December 31, 2021, indicating improved capital efficiency. This positive trend continued in the following year, reaching 26.71% as of December 31, 2022, demonstrating the company's ability to generate higher returns relative to its total capital employed.
However, there was a notable decline in the return on total capital in the subsequent year, dropping to 14.39% by December 31, 2023. This decrease suggests a potential dip in the company's efficiency in utilizing its total capital to generate profits. The most significant change occurred in the latest period, with the return on total capital falling sharply to 2.98% by December 31, 2024, indicating a substantial decrease in profitability relative to the capital invested.
Overall, while Diodes Incorporated initially showed strong performance in terms of return on total capital, there is a need for closer examination of the recent declining trend to understand the factors impacting the company's capital efficiency and profitability.
Peer comparison
Dec 31, 2024