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.
Peer comparison
Dec 31, 2023