EPAM Systems Inc (EPAM)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 501,239 | 572,966 | 542,316 | 379,324 | 302,850 |
| Long-term debt | US$ in thousands | 26,126 | 27,693 | 30,234 | 25,038 | 25,074 |
| Total stockholders’ equity | US$ in thousands | 3,470,890 | 3,001,530 | 2,487,120 | 1,983,020 | 1,596,140 |
| Return on total capital | 14.33% | 18.91% | 21.54% | 18.89% | 18.68% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $501,239K ÷ ($26,126K + $3,470,890K)
= 14.33%
EPAM Systems Inc's return on total capital has shown a declining trend over the past five years. The company's return on total capital decreased from 18.68% in 2019 to 15.07% in 2023. This declining trend indicates that the company may be becoming less efficient in generating returns from its total capital employed over time.
In 2021, EPAM Systems Inc achieved the highest return on total capital at 21.41%, which suggests a strong performance in utilizing its total capital to generate profits. However, the subsequent decrease in this ratio in 2022 and 2023 indicates a potential decrease in profitability relative to the capital invested.
Overall, EPAM Systems Inc's return on total capital indicates fluctuations in the company's efficiency in generating profits from its total capital base. It would be important for investors and stakeholders to closely monitor this trend and assess the reasons behind the fluctuations to understand the company's financial performance and sustainability.
Peer comparison
Dec 31, 2023