Guidewire Software Inc (GWRE)
Return on total capital
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -52,573 | -149,490 | -199,447 | -105,584 | -23,886 |
| Long-term debt | US$ in thousands | — | 397,171 | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,342,730 | 1,199,470 | 1,451,660 | 1,544,890 | 1,656,770 |
| Return on total capital | -3.92% | -9.36% | -13.74% | -6.83% | -1.44% |
July 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-52,573K ÷ ($—K + $1,342,730K)
= -3.92%
The return on total capital for Guidewire Software Inc has shown a declining trend over the past five years. Starting at -1.44% on July 31, 2020, the return worsened to -6.83% on July 31, 2021, reflecting deteriorating performance. The trend continued downward to -13.74% on July 31, 2022, indicating a significant decrease in profitability relative to the capital employed. However, there was a slight improvement on July 31, 2023, with the return on total capital at -9.36%, although still negative. Finally, as of July 31, 2024, the return on total capital stood at -3.92%, showing some recovery but remaining in the negative territory. Overall, the decreasing trend in return on total capital suggests that Guidewire Software Inc may be facing challenges in generating satisfactory returns in relation to the total capital invested during this period.
Peer comparison
Jul 31, 2024