Guidewire Software Inc (GWRE)
Return on total capital
| Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -23,512 | -52,573 | -56,792 | -97,912 | -108,718 | -149,490 | -187,794 | -192,382 | -208,623 | -199,447 | -167,322 | -151,744 | -139,357 | -105,584 | -61,159 | -39,933 | -30,893 | -23,886 | -47,145 | -37,312 |
| Long-term debt | US$ in thousands | 671,820 | — | — | — | — | 397,171 | — | — | — | — | — | — | — | — | 460,000 | — | — | 480,000 | — | — |
| Total stockholders’ equity | US$ in thousands | 1,268,030 | 1,342,730 | 1,285,370 | 1,256,110 | 1,205,650 | 1,199,470 | 1,195,110 | 1,220,170 | 1,185,160 | 1,451,660 | 1,185,160 | 1,480,470 | 1,498,380 | 1,544,890 | 1,556,480 | 1,644,660 | 1,659,860 | 1,656,770 | 1,586,010 | 1,592,560 |
| Return on total capital | -1.21% | -3.92% | -4.42% | -7.79% | -9.02% | -9.36% | -15.71% | -15.77% | -17.60% | -13.74% | -14.12% | -10.25% | -9.30% | -6.83% | -3.03% | -2.43% | -1.86% | -1.12% | -2.97% | -2.34% |
October 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-23,512K ÷ ($671,820K + $1,268,030K)
= -1.21%
The return on total capital of Guidewire Software Inc has shown a declining trend over the past few years, with negative percentages reported consistently from January 2020 to October 2024. The ratio deteriorated from -2.34% in January 2020 to a low of -17.60% in October 2022. However, there was a slight improvement in the following periods, with a recovery to -1.21% by October 2024.
The negative values signify that the company's total capital has not been generating returns sufficient to cover both debt and equity holders' interests. The downward trend indicates potential inefficiencies in utilizing the company's capital resources to generate profits. The recent recovery in the return on total capital may suggest efforts to enhance capital efficiency, but it would be important to monitor future performance to assess the sustainability of this improvement.
Peer comparison
Oct 31, 2024