Somnigroup International Inc. (SGI)
Return on total capital
| Dec 31, 2024 | Sep 30, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 639,100 | 625,600 | 607,500 | 591,800 | 602,600 | 628,900 | 646,200 | 630,600 | 677,700 | 783,600 | 832,600 | 895,500 | 889,100 | 828,500 | 760,700 | 608,200 | 528,400 | 420,400 | 358,800 | 385,700 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 559,000 | 564,500 | 411,800 | 326,600 | 323,400 | 214,100 | 147,500 | 43,600 | -12,300 | -143,300 | -180,900 | -91,300 | 285,800 | 371,000 | 410,100 | 327,200 | 503,600 | 456,200 | 249,700 | 208,400 |
| Return on total capital | 114.33% | 110.82% | 147.52% | 181.20% | 186.33% | 293.74% | 438.10% | 1,446.33% | — | — | — | — | 311.09% | 223.32% | 185.49% | 185.88% | 104.92% | 92.15% | 143.69% | 185.08% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $639,100K ÷ ($—K + $559,000K)
= 114.33%
Somnigroup International Inc.'s return on total capital has shown significant fluctuations over the periods analyzed. The ratio ranged from a high of 1,446.33% on March 31, 2023, to a low of 92.15% on September 30, 2020.
The company experienced a rapid increase in return on total capital from the end of 2021 towards the first quarter of 2023, reaching exceptionally high levels, which may indicate efficient utilization of both debt and equity to generate profits.
However, there seems to be a decline in performance in the subsequent periods, with the ratio dropping to 110.82% on September 30, 2024, after peaking at 311.09% on December 31, 2021.
These fluctuations suggest that Somnigroup International Inc. should closely monitor and manage its capital allocation strategies to sustain and improve its return on total capital in the long term. It is also important for the company to assess the reasons behind the drastic changes in the ratio to ensure sustained profitability and efficiency in capital utilization.
Peer comparison
Dec 31, 2024