LivaNova PLC (LIVN)
Return on total capital
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 94,472 | -21,241 | -43,883 | -63,988 | -22,477 | 75,941 | -30,423 | -17,137 | -26,945 | -42,665 | 20,493 | -48,918 | -74,469 | -362,466 | -336,367 | -317,718 | -308,942 | -170,523 | -140,153 | -154,063 |
| Long-term debt | US$ in thousands | 549,624 | 604,287 | 605,432 | 604,753 | 568,543 | 568,163 | 567,951 | 520,201 | 518,067 | 518,249 | 459,792 | 455,810 | 9,849 | 10,797 | 431,033 | 646,369 | 642,298 | 637,109 | 639,189 | 315,561 |
| Total stockholders’ equity | US$ in thousands | 1,320,260 | 1,310,040 | 1,242,540 | 1,221,540 | 1,277,630 | 1,225,470 | 1,240,610 | 1,227,340 | 1,207,620 | 1,146,960 | 1,282,000 | 1,291,850 | 1,294,640 | 1,299,500 | 1,028,670 | 1,055,130 | 1,109,260 | 1,350,790 | 1,333,190 | 1,392,710 |
| Return on total capital | 5.05% | -1.11% | -2.37% | -3.50% | -1.22% | 4.23% | -1.68% | -0.98% | -1.56% | -2.56% | 1.18% | -2.80% | -5.71% | -27.66% | -23.04% | -18.67% | -17.64% | -8.58% | -7.11% | -9.02% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $94,472K ÷ ($549,624K + $1,320,260K)
= 5.05%
Return on total capital is a financial metric that indicates how effectively a company is generating profits from its total invested capital. A negative return on total capital indicates that the company is not generating sufficient returns to cover the costs of both debt and equity capital.
For LivaNova PLC, the return on total capital has been consistently negative from March 2020 to June 2022, ranging from -9.02% to -23.04%. This suggests that during this period, the company was not efficiently utilizing its total invested capital to generate profits for its investors.
However, there was a slight improvement in the return on total capital in the subsequent quarters, with the metric turning positive in September 2023 at 4.23% and December 2024 at 5.05%. This improvement indicates that LivaNova PLC managed to enhance its profitability relative to its total capital employed during these periods.
Overall, the negative trend in the return on total capital for most of the periods analyzed indicates that LivaNova PLC faced challenges in effectively utilizing its capital resources to generate returns for its stakeholders. The positive turnaround in the later periods suggests potential improvements in the company's profitability and capital efficiency.
Peer comparison
Dec 31, 2024