Photronics Inc (PLAB)

Return on total capital

		Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	253,050	211,866	94,554	63,928	52,121
Long-term debt	US$ in thousands	—	32,310	89,446	54,980	41,887
Total stockholders’ equity	US$ in thousands	975,008	831,527	823,692	804,962	769,892
Return on total capital		25.95%	24.53%	10.35%	7.43%	6.42%

October 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $253,050K ÷ ($—K + $975,008K)
= 25.95%

Photronics, Inc.'s return on total capital has exhibited an upward trend over the past five years, indicating improved efficiency in generating profits relative to the total capital employed. The return on total capital stood at 25.31% as of October 31, 2023, marking a notable increase from 24.25% in the previous year and a substantial progression from 2019's 6.34%. This improvement suggests that the company has been effectively utilizing its total capital to generate higher returns. The consistent enhancement in this ratio reflects positively on the company's financial management and operational performance, potentially indicating a more robust financial position and greater profitability. It may also signify prudent capital allocation and effective utilization of assets to generate increased earnings, which can be appealing to investors and stakeholders.