Sitime Corporation (SITM)

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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-107,199	-85,463	-56,754	-12,068	16,141	42,053	52,595	42,388	32,842	14,653	22	-7,343	-8,645	-9,618
Long-term debt	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	708,052	710,342	708,267	713,660	708,480	694,442	680,284	653,874	632,497	325,997	303,926	295,269	109,880	102,823
Return on total capital		-15.14%	-12.03%	-8.01%	-1.69%	2.28%	6.06%	7.73%	6.48%	5.19%	4.49%	0.01%	-2.49%	-7.87%	-9.35%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-107,199K ÷ ($—K + $708,052K)
= -15.14%

SiTime Corp's return on total capital has shown a declining trend over the past eight quarters. In Q4 2023, the return on total capital was at -14.05%, indicating that the company's profitability from its total capital employed was negative. This follows a similar negative trend from the previous quarter where the return on total capital was at -12.03%.

The company's return on total capital has been deteriorating from positive figures in Q4 2022 (2.28%), Q3 2022 (6.06%), and Q2 2022 (7.73%) to negative figures in the recent quarters. This may suggest that SiTime Corp has been facing challenges in generating sufficient returns from its invested capital over time.

The declining trend in return on total capital could be a cause for concern as it indicates that the company is becoming less efficient in utilizing its total capital to generate profits. SiTime Corp may need to review and improve its operational efficiency, cost management, or revenue generation strategies to enhance its return on total capital in the future.