Ichor Holdings Ltd (ICHR)

Return on total capital

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	-8,788	-10,895	86,386	80,207	41,018
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	698,336	564,677	587,496	500,715	411,689
Return on total capital		-1.26%	-1.93%	14.70%	16.02%	9.96%

December 31, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-8,788K ÷ ($—K + $698,336K)
= -1.26%

Ichor Holdings Ltd's return on total capital has shown some fluctuation over the years based on the provided data. In December 31, 2020, the return on total capital was 9.96%, indicating the company generated approximately 9.96% in profit for every dollar of total capital invested.

By December 31, 2021, the return on total capital increased to 16.02%, reflecting an improvement in the company's ability to generate returns on its total invested capital. This suggests that the company became more efficient in utilizing its capital resources to generate profits.

However, in December 31, 2022, the return on total capital slightly decreased to 14.70%, albeit still at a relatively healthy level. This indicates that the company's profitability slightly declined compared to the previous year but remained above the 10% threshold, which is often considered a good benchmark for return on capital.

In December 31, 2023, the return on total capital turned negative at -1.93%, indicating that the company experienced a loss on its total invested capital during that period. This could raise concerns about the company's ability to effectively allocate its capital and generate profits.

Furthermore, in December 31, 2024, the return on total capital remained negative at -1.26%, signifying continued challenges in generating profits relative to the total capital invested in the business. This could suggest ongoing financial difficulties or inefficiencies within the company.

Overall, Ichor Holdings Ltd's return on total capital has shown variability over the years, with some periods of strong performance and others of negative returns. It is crucial for the company to analyze the factors driving these fluctuations and take appropriate actions to improve its capital utilization efficiency and profitability.