Globus Medical (GMED)
Return on total capital
| Dec 31, 2024 | Sep 30, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 259,162 | 260,652 | 279,674 | 298,937 | 273,506 | 256,780 | 247,812 | 249,173 | 240,119 | 204,387 | 199,634 | 178,027 | 184,045 | 218,468 | 215,447 | 141,204 | 115,472 | 106,836 | 99,805 | 168,090 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 4,177,330 | 4,069,400 | 3,976,360 | 3,922,360 | 3,997,960 | 4,187,280 | 1,985,060 | 1,914,820 | 1,846,370 | 1,764,110 | 1,699,090 | 1,785,370 | 1,741,390 | 1,718,270 | 1,639,270 | 1,562,990 | 1,506,300 | 1,417,200 | 1,336,920 | 1,363,370 |
| Return on total capital | 6.20% | 6.41% | 7.03% | 7.62% | 6.84% | 6.13% | 12.48% | 13.01% | 13.00% | 11.59% | 11.75% | 9.97% | 10.57% | 12.71% | 13.14% | 9.03% | 7.67% | 7.54% | 7.47% | 12.33% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $259,162K ÷ ($—K + $4,177,330K)
= 6.20%
Globus Medical's return on total capital has shown some fluctuation over the period from March 31, 2020, to December 31, 2024. The return on total capital ranged from a low of 6.13% on September 30, 2023, to a high of 13.14% on June 30, 2021.
The return on total capital gives us an indication of how effectively the company is generating returns from its total capital employed. A higher return on total capital indicates that the company is utilizing its capital efficiently to generate profits.
Overall, Globus Medical's return on total capital has shown some variability but has generally remained above 6%, which indicates that the company has been able to effectively utilize its capital to generate returns for its shareholders. It is worth noting that the company experienced a significant improvement in return on total capital in the second quarter of 2022, reaching 11.75%, and maintained relatively strong performance in subsequent quarters. However, there was a slight decline in the return on total capital in the last few quarters of the data period, reaching a low of 6.20% on December 31, 2024.
Investors and stakeholders may want to monitor this metric closely to assess the company's ability to generate returns on its total capital and its overall financial performance.
Peer comparison
Dec 31, 2024