Incyte Corporation (INCY)

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	836,766	531,782	572,352	-230,044	488,646
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	5,189,840	4,370,120	3,770,000	2,611,270	2,598,410
Return on total capital		16.12%	12.17%	15.18%	-8.81%	18.81%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $836,766K ÷ ($—K + $5,189,840K)
= 16.12%

Incyte Corp.'s return on total capital has exhibited fluctuations over the past five years. The return on total capital was positive in four out of the five years, indicating the company's ability to generate profits relative to the total capital employed in its operations.

The return on total capital was highest in 2021 at 16.76%, reflecting a strong performance in efficiently utilizing its total capital to generate returns for shareholders. This was followed by 2019 with a return of 15.92%, suggesting another year of solid performance.

However, there was a sharp decline in 2020 with a negative return on total capital of -7.47%, indicating that the company incurred losses relative to its total capital that year. It is important to investigate the factors contributing to this negative return to understand the underlying reasons.

The return on total capital improved in 2022 to 13.62% but slightly declined in 2023 to 12.48%. While positive, these returns were lower compared to the peak performance seen in 2021.

Overall, Incyte Corp.'s return on total capital performance has been mixed over the past five years, with fluctuations from positive returns to a year of negative return. Further analysis of the company's financial performance and its strategies may provide insights into the trends observed in the return on total capital.