Inspire Medical Systems Inc (INSP)

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	-19,906	-42,591	-39,842	-54,971	-31,084
Long-term debt	US$ in thousands	—	—	15,799	24,746	24,522
Total stockholders’ equity	US$ in thousands	572,514	496,008	229,048	229,747	139,835
Return on total capital		-3.48%	-8.59%	-16.27%	-21.60%	-18.91%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-19,906K ÷ ($—K + $572,514K)
= -3.48%

Inspire Medical Systems Inc's return on total capital has fluctuated over the past five years. In 2023, the return on total capital was -3.48%, showing some improvement compared to the previous year's -8.59%. However, despite this improvement, the return on total capital remains negative, indicating that the company is not generating sufficient returns on its total capital investment.

The trend over the five-year period shows a gradual improvement from -18.91% in 2019 to -3.48% in 2023. This suggests that the company has been working to enhance its efficiency in capital utilization and profitability. However, the negative values indicate that the company is not effectively utilizing its capital resources to generate profits for its stakeholders.

Inspire Medical Systems Inc needs to focus on optimizing its capital allocation strategies and operational efficiency to increase its return on total capital. By improving profitability and enhancing capital utilization, the company can work towards achieving positive returns on its total capital investment in the future.