EchoStar Corporation (SATS)

Return on total capital

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-757,426	146,336	171,290	172,823	189,644	173,651	189,214	208,616	217,010	211,475	185,868	155,332	112,473	105,962	95,065	55,632	73,077	-9,167	43,670	204,889
Long-term debt	US$ in thousands	17,843,600	—	—	—	18,752,200	—	—	—	1,495,990	1,495,800	1,495,620	1,495,440	1,495,260	1,495,080	1,494,900	2,390,220	2,389,170	—	—	—
Total stockholders’ equity	US$ in thousands	19,880,200	3,573,400	3,574,120	3,546,080	21,487,600	3,439,330	3,398,230	3,446,200	3,353,830	3,462,910	3,510,610	3,494,110	3,542,330	3,554,560	3,525,840	3,547,350	3,669,800	3,674,720	4,230,880	4,168,100
Return on total capital		-2.01%	4.10%	4.79%	4.87%	0.47%	5.05%	5.57%	6.05%	4.47%	4.26%	3.71%	3.11%	2.23%	2.10%	1.89%	0.94%	1.21%	-0.25%	1.03%	4.92%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-757,426K ÷ ($17,843,600K + $19,880,200K)
= -2.01%

Return on total capital is a key financial ratio that provides insight into how well a company is generating returns from all of its invested capital, including both debt and equity. The return on total capital for EchoStar Corporation has exhibited some fluctuations over the past few quarters.

The ratio was consistently positive from March 2019 to September 2022, indicating that the company was effectively generating returns on its total capital. However, the return on total capital decreased significantly in the fourth quarter of 2022 to 0.47% and turned negative in December 2023 at -2.01%. This suggests that EchoStar Corporation may have faced challenges in utilizing its total capital efficiently to generate returns for its investors.

It is important for the company to closely monitor and analyze the factors contributing to the decline in the return on total capital, as it can impact the overall financial performance and investor confidence. Additionally, management should focus on improving operational efficiency and maximizing the returns on both debt and equity investments to enhance the company's financial health and sustainability.