Omnicell Inc (OMCL)
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 | -34,868 | -2,323 | 89,507 | 35,526 | 78,352 |
| Long-term debt | US$ in thousands | 569,662 | 566,571 | — | 467,201 | 50,000 |
| Total stockholders’ equity | US$ in thousands | 1,188,950 | 1,130,140 | 1,146,690 | 967,503 | 845,254 |
| Return on total capital | -1.98% | -0.14% | 7.81% | 2.48% | 8.75% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-34,868K ÷ ($569,662K + $1,188,950K)
= -1.98%
Omnicell, Inc.'s return on total capital has fluctuated over the past five years. The company experienced a negative return on total capital of -1.98% in 2023, which indicates that the company's operating income was not generating a positive return on its total invested capital. This decline in return could be a cause for concern as it signifies inefficiency in the utilization of the company's capital resources.
In 2022, Omnicell improved its return on total capital to -0.14%, although it remained negative. The company's return on total capital turned positive in 2021 at 5.47%, signaling an improvement in the efficiency of capital utilization. However, the return decreased to 2.48% in 2020 and further declined to 8.75% in 2019.
The fluctuating trend in return on total capital suggests that Omnicell may be facing challenges in consistently generating returns on the capital invested in the business. This could be a result of various factors such as changes in operating performance, capital structure, or economic conditions. Omnicell should assess its strategies to enhance the efficiency of capital utilization and ensure sustainable returns for its investors.
Peer comparison
Dec 31, 2023