Masimo Corporation (MASI)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 138,400 | 210,000 | 274,739 | 264,002 | 234,494 |
| Long-term debt | US$ in thousands | 871,700 | 941,600 | 0 | — | — |
| Total stockholders’ equity | US$ in thousands | 1,364,800 | 1,338,900 | 1,550,200 | 1,407,640 | 1,167,870 |
| Return on total capital | 6.19% | 9.21% | 17.72% | 18.75% | 20.08% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $138,400K ÷ ($871,700K + $1,364,800K)
= 6.19%
Masimo Corporation's return on total capital has shown a declining trend over the past five years. In 2019, the company achieved a return on total capital of 20.08%, which decreased to 18.75% in 2020, further declining to 17.72% in 2021, and then to 9.21% in 2022. Finally, in 2023, the return on total capital was recorded at 6.19%. This downward trend indicates a decrease in the company's efficiency in generating profits relative to its total capital employed. It is important for the company to investigate the reasons behind this decline and take necessary actions to improve its return on total capital in the future.
Peer comparison
Dec 31, 2023