Rambus Inc (RMBS)
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 | 183,009 | 188,650 | -5,951 | 33,992 | -26,199 |
| Long-term debt | US$ in thousands | — | — | — | — | 156,031 |
| Total stockholders’ equity | US$ in thousands | 1,120,690 | 1,038,100 | 779,297 | 862,396 | 912,706 |
| Return on total capital | 16.33% | 18.17% | -0.76% | 3.94% | -2.45% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $183,009K ÷ ($—K + $1,120,690K)
= 16.33%
Rambus Inc's return on total capital has exhibited significant fluctuations over the years based on the provided data. The company experienced negative returns on its total capital in 2020 and 2022, indicating that it was unable to generate sufficient profits relative to the total capital employed during those periods. However, there was a notable improvement in the return on total capital in the subsequent years, with a significant increase to 3.94% in 2021, followed by a remarkable surge to 18.17% in 2023 and 16.33% in 2024.
These positive trends suggest that Rambus Inc effectively enhanced its utilization of total capital to generate higher returns in 2021, 2023, and 2024. The substantial increase in the return on total capital in 2023 and 2024 underscored the company's improved efficiency in capital allocation and operational performance, resulting in more substantial profits relative to the capital invested.
Overall, the upward trajectory in the return on total capital from 2020 to 2024 indicates an overall improvement in Rambus Inc's financial performance and capital efficiency during the period, reflecting positively on the company's ability to generate returns for its investors.
Peer comparison
Dec 31, 2024