Arcus Biosciences Inc (RCUS)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -330,000 | -340,000 | -280,000 | 54,000 | -124,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 485,000 | 462,000 | 657,000 | 842,000 | 502,000 |
| Return on total capital | -68.04% | -73.59% | -42.62% | 6.41% | -24.70% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-330,000K ÷ ($—K + $485,000K)
= -68.04%
Arcus Biosciences Inc's return on total capital has fluctuated significantly over the years based on the provided data. In December 31, 2020, the return on total capital was -24.70%, indicating that the company's capital investment did not yield a positive return during that period. However, by December 31, 2021, the return on total capital improved to 6.41%, reflecting a better performance in generating returns from the capital invested.
The subsequent years, however, saw a decline in the return on total capital for Arcus Biosciences Inc. By December 31, 2022, the return on total capital had dropped to -42.62%, indicating a significant decline in the company's ability to generate returns relative to the total capital employed. This trend continued in the following years, with the return on total capital reaching -73.59% in December 31, 2023, and -68.04% by December 31, 2024.
The negative return on total capital in the latter years suggests that Arcus Biosciences Inc may be facing challenges in efficiently utilizing its capital to generate satisfactory returns. It is essential for the company to assess its capital allocation strategies, operational efficiency, and profitability to improve its return on total capital in the future.
Peer comparison
Dec 31, 2024