Globus Medical (GMED)

Return on total capital

		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	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	133,142	177,047	236,345	237,909	227,951	192,123	185,750	163,850	171,953	212,288	208,972	137,533	111,433	102,877	94,925	163,357	171,988	177,800	174,040	173,310
Long-term debt	US$ in thousands	417,400	409,723	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	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	1,402,450	1,338,800	1,287,530	1,237,210
Return on total capital		3.02%	3.85%	11.91%	12.42%	12.35%	10.89%	10.93%	9.18%	9.87%	12.35%	12.75%	8.80%	7.40%	7.26%	7.10%	11.98%	12.26%	13.28%	13.52%	14.01%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $133,142K ÷ ($417,400K + $3,997,960K)
= 3.02%

Return on total capital is a key financial ratio that indicates how effectively a company is generating profit from its total capital employed, including both debt and equity. Globus Medical Inc's return on total capital has shown some fluctuations over the past eight quarters.

In Q4 2023, the company's return on total capital was 4.57%, which was lower compared to the previous quarter's 5.17%. However, it is essential to note that the return on total capital was significantly higher in Q2 2023 and Q1 2023, at 12.48% and 12.81% respectively. This indicates that the company was able to generate a higher profit relative to its total capital during these periods.

Looking further back, in Q4 2022, Q3 2022, Q2 2022, and Q1 2022, the return on total capital was relatively stable, ranging between 10.58% and 12.80%. This consistency suggests that Globus Medical Inc has been maintaining a healthy level of profitability in relation to its capital base during these quarters.

Overall, although there have been some fluctuations, the company's return on total capital indicates that it has been effectively utilizing its capital to generate profit. Investors and stakeholders may consider monitoring this ratio over time to assess the company's financial performance and efficiency in capital utilization.