Simulations Plus Inc (SLP)
Return on total capital
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 8,725 | 14,911 | 11,107 | 11,387 | 10,556 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 170,029 | 178,248 | 165,782 | 156,035 | 37,681 |
| Return on total capital | 5.13% | 8.37% | 6.70% | 7.30% | 28.01% |
August 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $8,725K ÷ ($—K + $170,029K)
= 5.13%
The return on total capital for Simulations Plus Inc. has shown a declining trend over the past five years, decreasing from 28.26% in 2019 to 5.13% in 2023. This suggests a decreasing efficiency in generating profits in relation to the total capital employed in the business. The declining trend may indicate challenges in effectively utilizing the company's capital resources to generate returns for shareholders. Further analysis of the company's capital structure, profitability, and operational efficiency is recommended to identify the underlying factors contributing to this trend and to formulate appropriate strategies for improvement.
Peer comparison
Aug 31, 2023