Progress Software Corporation (PRGS)

Return on total capital

		Nov 30, 2023	Nov 30, 2022	Nov 30, 2021	Nov 30, 2020	Nov 30, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	110,437	133,045	115,579	106,805	38,408
Long-term debt	US$ in thousands	710,883	611,845	534,527	364,260	284,002
Total stockholders’ equity	US$ in thousands	459,715	398,504	412,489	346,013	330,282
Return on total capital		9.43%	13.17%	12.20%	15.04%	6.25%

November 30, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $110,437K ÷ ($710,883K + $459,715K)
= 9.43%

Progress Software Corp.'s return on total capital has exhibited a fluctuating trend over the past five years. The return on total capital decreased from 16.10% in 2020 to 10.97% in 2023, with a notable decline in 2021 to 13.01%. However, the return on total capital increased to 12.54% in 2022 before declining again in 2023.

This fluctuation suggests that the company's ability to generate earnings from its total invested capital has been inconsistent over the years. It would be important to further investigate the factors contributing to these fluctuations, such as changes in the company's profitability, capital structure, and asset utilization, in order to gain a deeper understanding of the drivers behind the changes in return on total capital.