Jazz Pharmaceuticals PLC (JAZZ)

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	708,448	587,367	-75,688	475,263	371,401
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	4,093,760	3,737,000	3,085,730	3,965,190	3,659,740
Return on total capital		17.31%	15.72%	-2.45%	11.99%	10.15%

December 31, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $708,448K ÷ ($—K + $4,093,760K)
= 17.31%

Based on the data provided, Jazz Pharmaceuticals PLC's return on total capital has fluctuated over the past five years.

- In December 2020, the return on total capital was 10.15%, showing a moderate level of profitability relative to the capital invested in the business.
- By December 2021, there was an improvement in the return on total capital to 11.99%, indicating better efficiency in generating profits from the total capital employed in the company.
- However, in December 2022, there was a significant decline in the return on total capital to -2.45%, suggesting that the company may have faced challenges in generating returns sufficient to cover the total capital invested.
- The trend reversed in December 2023 where the return on total capital recovered significantly to 15.72%, showing a strong rebound in profitability and efficiency in capital utilization.
- By the end of December 2024, the return on total capital further improved to 17.31%, indicating the company's ability to generate higher returns relative to the total capital employed.

Overall, the company's return on total capital has shown variation over the years, with notable improvements in profitability in recent years. It is critical for Jazz Pharmaceuticals PLC to sustain and enhance this trend to ensure efficient capital allocation and long-term profitability.