Simulations Plus Inc (SLP)

Return on total capital

		Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	9,215	8,807	8,725	9,703	10,552	11,998	14,911	14,392	13,937	11,902	11,107	12,970	12,259	11,650	11,387	11,226	11,331	11,228	10,555	10,557
Long-term debt	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	177,038	172,341	170,029	169,390	164,593	180,122	178,248	177,559	172,576	168,456	165,782	165,398	161,497	158,031	156,035	46,587	40,862	39,187	37,681	36,168
Return on total capital		5.21%	5.11%	5.13%	5.73%	6.41%	6.66%	8.37%	8.11%	8.08%	7.07%	6.70%	7.84%	7.59%	7.37%	7.30%	24.10%	27.73%	28.65%	28.01%	29.19%

February 29, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $9,215K ÷ ($—K + $177,038K)
= 5.21%

Simulations Plus Inc's return on total capital has shown some fluctuations over the past few quarters. The return on total capital ranged from 5.11% to 8.37% in the recent quarters, indicating a moderate level of profitability relative to the capital employed. However, there was a significant spike in the return on total capital in the quarter ending May 31, 2020, where it reached 24.10% and continued to increase further in subsequent quarters, showing a peak of 29.19% by the quarter ending May 31, 2019.

The varying trends in the return on total capital suggest changes in the efficiency of utilizing the total capital invested in the company's operations. It is essential for investors and stakeholders to closely monitor these fluctuations to assess the company's ability to generate returns on the overall capital employed.