Schrodinger Inc (SDGR)

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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-177,448	-176,365	-166,335	-148,675	-146,817	-140,794	-129,305	-116,174	-111,443	-105,512	-86,283	-73,028	-60,916
Long-term debt	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	548,558	563,581	611,225	590,260	447,894	463,110	493,058	530,667	557,071	579,806	605,751	631,768	624,015	630,878	296,120	295,517
Return on total capital		-32.35%	-31.29%	-27.21%	-25.19%	-32.78%	-30.40%	-26.23%	-21.89%	-20.01%	-18.20%	-14.24%	-11.56%	-9.76%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-177,448K ÷ ($—K + $548,558K)
= -32.35%

Based on the data provided, Schrodinger Inc has experienced a consistent decline in its return on total capital over the past eight quarters. The return on total capital has remained negative, indicating that the company is not generating sufficient returns on the total capital employed.

The return on total capital has ranged from -21.89% to -32.78% over the past two years. This downward trend suggests that Schrodinger Inc has been facing challenges in efficiently utilizing its capital to generate profits. The decreasing returns on total capital may indicate inefficiencies in the company's operations, poor investment decisions, or a decline in the overall profitability of the business.

It is important for Schrodinger Inc to address the factors contributing to its low return on total capital to improve its financial performance and long-term sustainability. Management should focus on optimizing capital allocation, improving operational efficiency, and exploring strategic alternatives to enhance profitability and create value for shareholders.