Innoviva Inc (INVA)

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	59,597	213,255	302,738	426,206	303,164
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	691,159	674,955	565,788	414,743	539,912
Return on total capital		8.62%	31.60%	53.51%	102.76%	56.15%

December 31, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $59,597K ÷ ($—K + $691,159K)
= 8.62%

Based on the data provided for Innoviva Inc's return on total capital, we observe the following trends:

1. December 31, 2020: The return on total capital was reported at 56.15%. This indicates that for every dollar of total capital employed, the company generated a return of 56.15 cents.

2. December 31, 2021: The return on total capital significantly improved to 102.76%, reflecting a substantial improvement in the company's ability to generate returns on its total capital base.

3. December 31, 2022: The return on total capital decreased to 53.51%, suggesting a comparably lower return compared to the previous year but still above the initial level in 2020.

4. December 31, 2023: The return on total capital further declined to 31.60%, indicating a continued decrease in the efficiency of capital utilization by the company.

5. December 31, 2024: The return on total capital dropped to 8.62%, representing a significant decrease from the previous year and a reflection of potential challenges in generating returns on the total capital base.

Overall, the return on total capital for Innoviva Inc has shown fluctuations over the years, with a notable increase in 2021 followed by a decline in the subsequent years. It is important for the company to analyze the factors driving these changes and take necessary steps to improve the efficiency of capital utilization to enhance overall financial performance and shareholder value.