Sitime Corporation (SITM)

Return on total capital

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	-107,200	16,142	32,843	-8,645	-4,901
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	708,052	708,480	632,497	109,880	62,140
Return on total capital		-15.14%	2.28%	5.19%	-7.87%	-7.89%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-107,200K ÷ ($—K + $708,052K)
= -15.14%

The return on total capital for SiTime Corp has exhibited fluctuations over the past five years. In 2023, the company experienced a notably negative return on total capital of -14.05%, indicating that the company's profit generated from its invested capital decreased significantly compared to the previous year. This decline may suggest inefficiencies in the company's capital utilization or a decrease in profit generation relative to the amount of capital employed.

In contrast, in 2022 and 2021, SiTime Corp achieved positive returns on total capital of 2.28% and 5.19%, respectively, indicating that the company was able to generate a modest profit from its total invested capital during those years. This positive trend suggests better capital efficiency and profit generation compared to the negative returns reported in 2023, 2020, and 2019.

The negative returns on total capital in 2020 and 2019 at -7.84% and -4.72%, respectively, highlight periods where the company's profit generated from its total capital was insufficient to cover the cost of capital. This may imply challenges in generating sustainable profits relative to the amount of capital invested during those years.

Overall, the fluctuating trend in SiTime Corp's return on total capital underscores the importance of efficient capital allocation and profit generation to maximize shareholder value and company performance.