Harmonic Inc (HLIT)

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	21,837	28,930	48,496	58,026	49,737	48,434	42,286	24,919	19,496	20,485	13,539	789	-14,708	-24,165	172	3,169	13,083	13,702	-12,498	-4,092
Long-term debt	US$ in thousands	10,495	9,992	10,539	11,350	11,161	123,856	—	—	111,930	—	—	—	139,593	137,725	140,548	99,880	88,629	130,217	118,070	116,413
Total stockholders’ equity	US$ in thousands	436,874	340,800	342,801	335,786	324,506	300,621	296,836	284,653	295,913	273,681	267,324	259,770	258,302	234,457	230,282	236,322	252,446	241,050	212,066	220,561
Return on total capital		4.88%	8.25%	13.73%	16.72%	14.82%	11.41%	14.25%	8.75%	4.78%	7.48%	5.06%	0.30%	-3.70%	-6.49%	0.05%	0.94%	3.84%	3.69%	-3.79%	-1.21%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $21,837K ÷ ($10,495K + $436,874K)
= 4.88%

Return on Total Capital is a key financial ratio that measures a company's ability to generate profits from the total capital employed in its operations. Analyzing Harmonic, Inc.'s return on total capital over the past eight quarters reveals fluctuations in the company's efficiency in utilizing its capital effectively.

In Q1 2023, Harmonic, Inc. exhibited a robust return on total capital of 12.11%, indicating that the company generated a significant profit compared to the total capital invested. This improvement followed a positive trend seen in Q4 2022 when the return on total capital was 10.75%.

However, in the subsequent quarters, there was a downward trend in the return on total capital. Q2 2023 showed a decrease to 10.72%, followed by a further decline to 6.60% in Q3 2023, and a decrease to 4.05% in Q4 2023. These declining figures suggest a potential decline in profitability relative to the total capital employed over the past quarters.

Comparing the recent performance to the same period in the prior year, it is noted that the return on total capital was relatively lower in Q4 2023 compared to Q4 2022 (4.05% vs. 10.75%). This indicates a diminished efficiency in generating profits from the total capital in the latest quarter compared to the same period the previous year.

Overall, the fluctuating trend in Harmonic, Inc.'s return on total capital highlights the company's varying ability to generate returns for its investors in relation to the capital deployed. Further analysis and investigation may be necessary to understand the factors contributing to these fluctuations and to implement strategies to improve the company's capital efficiency in the future.