Lumentum Holdings Inc (LITE)
Return on total capital
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -434,000 | -66,900 | 315,300 | 529,800 | 235,500 |
| Long-term debt | US$ in thousands | 2,503,200 | 2,500,000 | 1,466,100 | 789,800 | 1,120,300 |
| Total stockholders’ equity | US$ in thousands | 957,300 | 1,355,800 | 1,875,000 | 1,972,800 | 1,749,200 |
| Return on total capital | -12.54% | -1.74% | 9.44% | 19.18% | 8.21% |
June 30, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-434,000K ÷ ($2,503,200K + $957,300K)
= -12.54%
Lumentum Holdings Inc's return on total capital has experienced fluctuations in recent years. In the most recent period ending June 30, 2024, the return on total capital was at a negative 12.54%, indicating a decrease in profitability compared to the previous year, where it was also negative but at a lower rate of 1.74%. This negative trend may raise concerns about the company's ability to generate returns on its total capital efficiently.
Looking further back, the return on total capital was 9.44% in 2022, 19.18% in 2021, and 8.21% in 2020. The significant decrease from 2021 to 2022 followed by the further decline in 2024 suggests a potential decline in the company's profitability and efficiency in utilizing its total capital resources.
It is crucial for Lumentum Holdings Inc to closely evaluate the underlying reasons for the declining return on total capital and implement strategic measures to improve operational efficiency and financial performance to ensure sustainable growth and profitability in the future.
Peer comparison
Jun 30, 2024