SolarEdge Technologies Inc (SEDG)

Return on total capital

		Jun 30, 2024	Mar 31, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-588,194	-277,654	40,205	272,623	373,756	259,410	166,120	212,321	194,328	213,875	207,139	195,697	159,677	134,083	157,730	178,662	214,285	229,673	189,946	104,642
Long-term debt	US$ in thousands	638,703	628,115	627,381	626,647	625,914	625,182	624,451	623,721	622,991	622,263	1,243,070	620,808	620,082	619,357	1,146,700	570,332	—	—	173	4,055
Total stockholders’ equity	US$ in thousands	2,106,190	2,240,550	2,411,910	2,490,410	2,520,190	2,350,790	2,176,370	2,052,130	2,027,530	2,010,520	1,310,040	1,242,080	1,177,790	1,099,920	1,085,760	1,032,040	924,801	866,418	811,670	732,012
Return on total capital		-21.43%	-9.68%	1.32%	8.75%	11.88%	8.72%	5.93%	7.93%	7.33%	8.12%	8.11%	10.51%	8.88%	7.80%	7.07%	11.15%	23.17%	26.51%	23.40%	14.22%

June 30, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-588,194K ÷ ($638,703K + $2,106,190K)
= -21.43%

Return on total capital is a key financial metric that indicates the efficiency of a company in generating profits from both its debt and equity capital. Looking at the historical trend of SolarEdge Technologies Inc's return on total capital, we can see fluctuations in the performance over the past few quarters.

The return on total capital for SolarEdge Technologies Inc has varied significantly, ranging from -21.43% in June 2024 to a high of 26.51% in March 2020. The negative returns in recent quarters indicate that the company may not be efficiently utilizing its total capital to generate profits. It is concerning to see negative returns as it suggests that the company may not be effectively deploying its resources to generate adequate returns for its investors.

While there have been periods of positive returns, such as in June 2023 and September 2019, the figures have been inconsistent. The return on total capital peaked at 26.51% in March 2020, indicating a period of strong performance in terms of capital efficiency.

Overall, the trend of return on total capital for SolarEdge Technologies Inc shows variability and inconsistency, with recent quarters reflecting lower or negative returns. It may be important for the company to focus on improving its operational efficiency and capital allocation strategies to enhance its overall profitability and returns for stakeholders.