Penumbra Inc (PEN)
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 | 81,389 | 6,082 | -7,501 | -38,942 | 47,508 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,178,940 | 998,858 | 953,927 | 641,498 | 485,892 |
| Return on total capital | 6.90% | 0.61% | -0.79% | -6.07% | 9.78% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $81,389K ÷ ($—K + $1,178,940K)
= 6.90%
The return on total capital for Penumbra Inc has fluctuated over the past five years. In 2019, the company had a relatively high return on total capital of 9.19%, indicating efficient use of both equity and debt to generate profits. However, this metric decreased significantly in 2020 to -5.81%, which suggests that the company's capital investments may not have been yielding positive returns.
Subsequently, there was a further decline in 2021 to -0.76%, indicating ongoing challenges in generating returns on the total capital employed by the company. This negative trend reversed in 2022 when the return on total capital improved to 0.59%, although it remained relatively low.
The most recent data for 2023 shows a return on total capital of 7.62%, representing a notable increase compared to the previous years. This improvement suggests that Penumbra Inc may have implemented more effective strategies to enhance the profitability of its capital investments.
Overall, the fluctuating trend in Penumbra Inc's return on total capital indicates varying levels of efficiency in utilizing its capital resources to generate returns for its shareholders. Continued monitoring of this metric will be crucial to assess the company's financial performance and effectiveness in deploying its capital in the future.
Peer comparison
Dec 31, 2023