Progress Software Corporation (PRGS)

Return on total capital

Nov 30, 2024 Nov 30, 2023 Nov 30, 2022 Nov 30, 2021 Nov 30, 2020
Earnings before interest and tax (EBIT) US$ in thousands 124,003 110,437 133,045 115,579 106,805
Long-term debt US$ in thousands 1,526,270 710,883 611,845 534,527 364,260
Total stockholders’ equity US$ in thousands 438,788 459,715 398,504 412,489 346,013
Return on total capital 6.31% 9.43% 13.17% 12.20% 15.04%

November 30, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $124,003K ÷ ($1,526,270K + $438,788K)
= 6.31%

Progress Software Corporation's return on total capital has shown a declining trend over the past five years. As of November 30, 2020, the return on total capital stood at 15.04%, indicating that the company generated $15.04 in profit for every $100 of total capital invested. However, this metric decreased to 12.20% by November 30, 2021, and further to 13.17% by November 30, 2022.

The most significant decline was observed in the most recent years, with the return on total capital dropping to 9.43% by November 30, 2023, and further down to 6.31% by November 30, 2024. This downward trend suggests that the company may be facing challenges in efficiently utilizing its total capital to generate profits, which could raise concerns for investors and stakeholders.

It is crucial for Progress Software Corporation to closely examine the factors contributing to this decline in return on total capital and implement strategies to improve capital efficiency and profitability in the future. Monitoring and addressing these trends will be essential for the company to enhance its financial performance and sustain long-term growth.