Smart Global Holdings Inc (SGH)

Return on total capital

		Mar 1, 2024	Dec 1, 2023	Aug 25, 2023	May 26, 2023	Feb 24, 2023	Nov 25, 2022	Aug 26, 2022	May 27, 2022	Feb 25, 2022	Nov 26, 2021	Aug 27, 2021	May 28, 2021	Feb 26, 2021	Nov 27, 2020	May 29, 2020	Feb 28, 2020	Nov 29, 2019	Aug 30, 2019	May 31, 2019	Mar 1, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-6,032	-4,797	8,745	33,444	62,034	65,664	67,176	4,953	-18,357	-6,970	-15,705	33,522	38,784	31,725	35,533	32,868	47,163	89,081	122,630	163,925
Long-term debt	US$ in thousands	740,663	748,299	754,820	782,258	789,364	796,985	—	485,026	483,911	341,150	340,484	338,047	210,811	197,634	193,547	191,593	177,303	182,450	188,428	194,537
Total stockholders’ equity	US$ in thousands	405,042	410,160	222,475	318,097	325,829	352,120	371,611	392,602	348,827	322,940	310,251	269,433	258,559	278,318	264,519	307,051	271,784	273,460	242,080	250,290
Return on total capital		-0.53%	-0.41%	0.89%	3.04%	5.56%	5.71%	18.08%	0.56%	-2.20%	-1.05%	-2.41%	5.52%	8.26%	6.67%	7.76%	6.59%	10.50%	19.54%	28.48%	36.85%

March 1, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-6,032K ÷ ($740,663K + $405,042K)
= -0.53%

The return on total capital for Smart Global Holdings Inc has exhibited fluctuations over the past two years. The trend shows a range of values from negative figures to double-digit positive percentages. Notably, there have been periods of strong performance, with the highest returns recorded in the range of 18.08% to 36.85%. However, there are also instances when the company experienced negative returns, indicating challenges in generating sufficient profits relative to the total capital employed. The return on total capital metric provides insights into the company's ability to generate earnings from its invested capital, with higher values reflecting more efficient capital utilization. It is essential for the company to focus on improving its return on total capital to drive sustainable profitability and value creation for its stakeholders.