Hims Hers Health Inc (HIMS)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -29,453 | -68,697 | -110,795 | -17,977 | -71,605 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 344,029 | 311,741 | 334,619 | -146,874 | -139,793 |
| Return on total capital | -8.56% | -22.04% | -33.11% | — | — |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-29,453K ÷ ($—K + $344,029K)
= -8.56%
The return on total capital for Hims Hers Health Inc has shown a fluctuating trend over the past five years. The company reported negative returns on total capital for the years 2023, 2022, and 2021, indicating that the company did not generate sufficient profits to cover the total capital employed in those respective years. The return on total capital improved from -33.11% in 2021 to -22.04% in 2022 but deteriorated again to -8.56% in 2023.
The negative return on total capital indicates that the company's capital investments have not been generating satisfactory returns. It suggests that the company may need to reevaluate its capital allocation strategies, operational efficiencies, and revenue generation mechanisms to enhance profitability and create value for its investors. Further analysis of the company's financial performance and capital structure may be necessary to identify the underlying reasons for the declining returns on total capital.