Extreme Networks Inc (EXTR)

Return on total capital

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	-60,513	111,491	64,983	33,041	-96,742
Long-term debt	US$ in thousands	178,265	187,591	270,570	315,865	394,585
Total stockholders’ equity	US$ in thousands	25,282	116,752	90,343	54,468	5,398
Return on total capital		-29.73%	36.63%	18.01%	8.92%	-24.19%

June 30, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-60,513K ÷ ($178,265K + $25,282K)
= -29.73%

Extreme Networks Inc's return on total capital has been somewhat volatile over the past five years. In particular:

1. The return on total capital was significantly negative at -29.73% as of June 30, 2024, indicating that the company's total capital may not be generating a sufficient return to cover both debt and equity holders.

2. The return on total capital showed a substantial improvement in the previous year, reaching 36.63% as of June 30, 2023. This suggests that the company was able to generate more profit relative to its total capital invested.

3. In the following two years, the return on total capital remained positive but at more moderate levels of 18.01% as of June 30, 2022, and 8.92% as of June 30, 2021. These figures indicate a somewhat stable performance in terms of capital efficiency.

4. However, the return on total capital was notably negative at -24.19% as of June 30, 2020, which could signal inefficiencies in the utilization of capital during that period.

Overall, Extreme Networks Inc's return on total capital has exhibited fluctuations, with a mix of positive and negative figures over the past five years, suggesting varying levels of capital efficiency within the company.