Innoviva Inc (INVA)

Return on total capital

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	59,597	65,081	142,961	187,171	183,228	88,161	289,145	282,130	260,741	372,529	178,768	294,076	386,986	409,634	353,562	335,832	303,164	291,909	305,282	256,820
Long-term debt	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	1,054,680	668,542	665,515	703,681	674,955	627,493	555,087	561,493	565,788	641,368	388,337	386,642	414,743	402,811	329,780	634,461	539,912	485,556	456,907	379,543
Return on total capital		5.65%	9.73%	21.48%	26.60%	27.15%	14.05%	52.09%	50.25%	46.08%	58.08%	46.03%	76.06%	93.31%	101.69%	107.21%	52.93%	56.15%	60.12%	66.81%	67.67%

December 31, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $59,597K ÷ ($—K + $1,054,680K)
= 5.65%

Innoviva Inc's return on total capital has shown fluctuations over the periods from March 31, 2020, to December 31, 2024. The ratio started at a high of 67.67% in March 2020 and experienced a gradual decline to 5.65% by December 2024. Notably, the return on total capital surged to peak levels of 107.21% in June 2021 and 101.69% in September 2021, indicating exceptional efficiency in utilizing the total capital during those periods. However, from June 2022 onwards, the ratio declined significantly, hitting a low of 5.65% by December 2024.

The decreasing trend in the return on total capital suggests potential challenges in generating profits relative to the total capital employed by the company. It is important for Innoviva Inc to closely monitor and address the factors contributing to this decline to ensure sustainable profitability and efficient capital utilization in the future.