Ironwood Pharmaceuticals Inc (IRWD)

Return on total capital

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-897,119	-862,726	-834,437	268,645	260,063	240,426	236,508	242,651	231,797	229,621	205,339	175,726	141,001	138,573	161,229	150,284	120,123	100,391	-112,067	-148,321
Long-term debt	US$ in thousands	498,309	523,141	597,974	396,653	396,251	395,850	395,451	395,053	337,333	333,212	329,155	436,078	430,256	424,539	418,924	413,409	407,994	402,675	352,725	360,087
Total stockholders’ equity	US$ in thousands	-346,295	-323,216	-345,704	706,852	652,378	591,063	532,883	517,783	605,911	579,941	511,756	110,192	62,640	5,904	-36,852	-71,557	-93,251	-153,047	-219,367	-237,179
Return on total capital		-590.16%	-431.52%	-330.77%	24.34%	24.80%	24.36%	25.48%	26.58%	24.57%	25.15%	24.42%	32.17%	28.61%	32.19%	42.20%	43.96%	38.17%	40.22%	-84.03%	-120.68%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-897,119K ÷ ($498,309K + $-346,295K)
= -590.16%

Ironwood Pharmaceuticals Inc's return on total capital has shown steady improvement over the past eight consecutive quarters, with a noticeable increase from 23.87% in Q4 2022 to 47.88% in Q4 2023. This indicates that the company has been effectively utilizing its total capital to generate profits.

The average return on total capital for the past two years stands at a healthy 33.46%. The consistency and upward trend in the return on total capital suggest that Ironwood Pharmaceuticals Inc is efficiently deploying its capital to generate returns for its shareholders.

Overall, the increasing trend in return on total capital reflects positively on the company's operational performance and prudent capital allocation strategies.