Illumina Inc (ILMN)
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 | -833,000 | -1,040,000 | -4,179,000 | 945,000 | 905,000 |
| Long-term debt | US$ in thousands | 1,490,000 | 1,489,000 | 1,487,000 | 1,695,000 | 673,000 |
| Total stockholders’ equity | US$ in thousands | 2,373,000 | 5,745,000 | 6,599,000 | 10,740,000 | 4,694,000 |
| Return on total capital | -21.56% | -14.38% | -51.68% | 7.60% | 16.86% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-833,000K ÷ ($1,490,000K + $2,373,000K)
= -21.56%
Illumina Inc's return on total capital has shown a significant decline over the five-year period, with the ratio decreasing from 16.86% as of December 31, 2020, to -21.56% as of December 31, 2024. A positive return on total capital indicates that the company is generating profits from its invested capital, while a negative return suggests that the company is experiencing losses relative to its total capital.
The declining trend in the return on total capital may raise concerns about Illumina's ability to efficiently utilize its capital to generate returns for its shareholders. It is essential for the company to address the factors contributing to the negative returns and take necessary steps to improve its profitability and operational efficiency. Investors and stakeholders may closely monitor this ratio as an indicator of the company's financial performance and long-term sustainability.
Peer comparison
Dec 31, 2024