Ironwood Pharmaceuticals Inc (IRWD)

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	-897,120	260,063	231,798	138,339	58,107
Long-term debt	US$ in thousands	498,309	396,251	337,333	430,256	407,994
Total stockholders’ equity	US$ in thousands	-346,295	652,378	605,911	62,640	-93,251
Return on total capital		-590.16%	24.80%	24.57%	28.07%	18.46%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-897,120K ÷ ($498,309K + $-346,295K)
= -590.16%

Ironwood Pharmaceuticals Inc has shown a fluctuating trend in its return on total capital over the past five years. The return on total capital indicates how efficiently the company is generating profits from its total capital employed.

In 2023, Ironwood Pharmaceuticals Inc achieved an impressive return on total capital of 47.88%, a significant increase from the previous year's 23.87%. This suggests that the company effectively utilized its total capital to generate higher profits in 2023.

Comparing 2023 with 2021 and 2022, the return on total capital has shown a notable improvement. The company's return on total capital in 2023 surpassed both 2021 and 2022, indicating improved efficiency in utilizing its capital resources to generate profits.

However, when comparing 2023 to 2020 and 2019, Ironwood Pharmaceuticals Inc experienced a decline in return on total capital. Despite the decline, the company's return on total capital in 2023 remained strong compared to the previous years, highlighting its ability to generate profits relative to its capital base.

Overall, Ironwood Pharmaceuticals Inc's return on total capital in 2023 reflects a positive trend, demonstrating the company's ability to efficiently generate profits from its total capital employed. Continued monitoring of this ratio will be essential to assess the company's financial performance and efficiency in capital utilization.