F5 Networks Inc (FFIV)

Return on total capital

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	658,591	472,568	403,792	394,025	392,267
Long-term debt	US$ in thousands	—	—	0	349,772	369,047
Total stockholders’ equity	US$ in thousands	3,129,380	2,800,230	2,468,980	2,360,210	2,232,270
Return on total capital		21.05%	16.88%	16.35%	14.54%	15.08%

September 30, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $658,591K ÷ ($—K + $3,129,380K)
= 21.05%

Over the past five years, F5 Networks Inc has shown a consistent improvement in its return on total capital. The return on total capital has increased from 15.08% in 2020 to 21.05% in 2024, indicating the company's ability to generate more profits relative to the total capital employed. This steady improvement reflects positively on the company's operational efficiency and capital allocation decisions.

The rise in return on total capital suggests that F5 Networks Inc has been effectively utilizing its capital resources to generate higher returns for its shareholders. The company's management may have implemented more efficient strategies or invested in projects with higher profitability, leading to the improved financial performance.

Overall, the increasing trend in return on total capital for F5 Networks Inc signifies a positive outlook for the company's financial health and a strong capability to generate returns on the total capital invested in the business.