QuinStreet Inc (QNST)
Return on total capital
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -29,716 | -20,572 | -4,687 | 30,625 | 19,382 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 216,825 | 229,801 | 286,000 | 295,148 | 255,944 |
| Return on total capital | -13.71% | -8.95% | -1.64% | 10.38% | 7.57% |
June 30, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-29,716K ÷ ($—K + $216,825K)
= -13.71%
QuinStreet Inc's return on total capital has shown a declining trend over the past five years. The company's return on total capital was -13.71% as of June 30, 2024, indicating that the company generated a negative return on the total capital employed during that period. This is a significant decrease compared to the prior year, reflecting a worsening performance in utilizing its total capital effectively.
In the preceding years, the return on total capital for QuinStreet Inc was also below the benchmark level of generating positive returns. Specifically, the returns were -8.95% in 2023, -1.64% in 2022, 10.38% in 2021, and 7.57% in 2020. This overall trend suggests a fluctuating performance in terms of generating returns on the total capital employed by the company.
The negative returns in recent years may raise concerns among investors and stakeholders about the company's ability to generate profits and create value from the capital invested in its operations. It indicates inefficiencies in utilizing the capital resources effectively to generate adequate returns.
Given the sustained decline in return on total capital, it would be prudent for QuinStreet Inc to reassess its capital allocation strategies, operational efficiencies, and overall business performance to enhance its ability to generate positive returns on the total capital employed. This analysis underscores the importance of closely monitoring and improving the company's utilization of its capital resources to drive profitability and sustainable growth.
Peer comparison
Jun 30, 2024