Extreme Networks Inc (EXTR)

Return on total capital

		Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-60,513	26,895	117,754	130,889	111,443	83,216	70,700	64,449	64,983	71,856	65,884	52,515	33,041	2,123	-46,195	-66,543	-96,693	-95,378	-60,621	-40,149
Long-term debt	US$ in thousands	178,265	180,597	182,931	185,261	187,591	198,188	222,669	231,640	270,570	279,514	288,458	297,379	315,865	322,402	328,941	335,461	394,585	399,704	348,916	353,406
Total stockholders’ equity	US$ in thousands	25,282	64,962	108,184	108,482	116,752	103,192	84,567	110,603	90,343	99,263	69,599	72,325	54,468	35,136	17,925	9,911	5,398	16,400	50,927	93,849
Return on total capital		-29.73%	10.95%	40.45%	44.56%	36.62%	27.61%	23.01%	18.83%	18.01%	18.97%	18.40%	14.20%	8.92%	0.59%	-13.32%	-19.27%	-24.17%	-22.92%	-15.16%	-8.98%

June 30, 2024 calculation

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

Return on total capital is a key financial metric that measures a company's ability to generate profits from its total invested capital. Extreme Networks Inc's return on total capital has fluctuated over the past few quarters, ranging from a low of -29.73% to a high of 44.56%.

The negative return on total capital in some quarters indicates that the company's capital investment did not yield positive returns during those periods. However, the positive returns in other quarters suggest that the company was able to effectively generate profits relative to the capital it employed.

The trend in return on total capital shows variability but with some improvement over time. The company experienced a significant improvement in return on total capital from negative figures to positive figures in the recent quarters, indicating potential efficiency and profitability enhancements in its operations.

It is essential for Extreme Networks Inc to continue monitoring and improving its return on total capital to ensure sustainable profitability and efficient utilization of its capital resources.