Illumina Inc (ILMN)
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 | -1,040,000 | -4,179,000 | 945,000 | 905,000 | 1,182,000 |
| Long-term debt | US$ in thousands | 1,489,000 | 1,487,000 | 1,695,000 | 673,000 | 1,141,000 |
| Total stockholders’ equity | US$ in thousands | 5,745,000 | 6,599,000 | 10,740,000 | 4,694,000 | 4,613,000 |
| Return on total capital | -14.38% | -51.68% | 7.60% | 16.86% | 20.54% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-1,040,000K ÷ ($1,489,000K + $5,745,000K)
= -14.38%
Illumina Inc's return on total capital has been fluctuating over the past five years. In 2019, the return was 17.12%, indicating the company was efficiently utilizing its capital to generate profits. However, there has been a downward trend in the subsequent years, with returns of 9.87% in 2021, -0.99% in 2022, and further declining to -3.07% in 2023.
This negative return in 2023 suggests that Illumina Inc may not be effectively utilizing its total capital to generate returns for its shareholders. It is essential for the company to address the factors contributing to this decline to improve its financial performance and enhance shareholder value.
Peer comparison
Dec 31, 2023