Kyndryl Holdings Inc (KD)
Return on total capital
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Dec 31, 2021 | Sep 30, 2021 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -48,000 | -332,000 | -527,000 | -650,000 | -755,000 | -1,199,000 | -1,539,000 | |||
| Long-term debt | US$ in thousands | 2,900,000 | 3,000,000 | 3,000,000 | 3,000,000 | 3,000,000 | 3,000,000 | 3,000,000 | 3,000,000 | 3,000,000 | 280,000 |
| Total stockholders’ equity | US$ in thousands | 1,015,000 | 1,189,000 | 1,013,000 | 1,240,000 | 1,365,000 | 1,832,000 | 1,650,000 | 2,117,000 | 2,765,000 | 5,430,000 |
| Return on total capital | -1.23% | -7.93% | -13.13% | -15.33% | -17.30% | -24.81% | -33.10% |
March 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-48,000K ÷ ($2,900,000K + $1,015,000K)
= -1.23%
Kyndryl Holdings Inc's return on total capital has shown a declining trend over the past few quarters, indicating a decreasing ability to generate profits relative to the total capital employed in the business. The negative values imply that the company's earnings are insufficient to cover the cost of both debt and equity capital.
The return on total capital was -1.23% as of March 31, 2024, which was an improvement compared to the previous quarter but still indicates a subpar performance. The company's financial performance worsened throughout 2023, with returns of -7.93% in December 2023, -13.13% in September 2023, and -15.33% in June 2023. The trend of decreasing returns on total capital is concerning, highlighting potential inefficiencies in the company's capital utilization and profitability.
Further back, the return on total capital was even lower, with values of -17.30% in March 2023, -24.81% in December 2022, and -33.10% in September 2022. These figures suggest that Kyndryl Holdings Inc has been struggling to earn an adequate return on the capital invested in the business, raising questions about its operational performance and financial health.
Overall, the consistent decline in return on total capital over multiple quarters indicates a need for the company to address underlying issues affecting its profitability and capital efficiency in order to enhance shareholder value and sustainable growth.
Peer comparison
Mar 31, 2024