Synopsys Inc (SNPS)

Return on total capital

		Oct 31, 2024	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	1,355,710	1,314,720	1,123,370	810,036	644,199
Long-term debt	US$ in thousands	15,601	18,078	20,824	25,094	100,823
Total stockholders’ equity	US$ in thousands	8,990,700	6,147,310	5,515,720	5,295,140	4,907,400
Return on total capital		15.05%	21.32%	20.29%	15.23%	12.86%

October 31, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,355,710K ÷ ($15,601K + $8,990,700K)
= 15.05%

Synopsys Inc's return on total capital has shown a positive trend over the past five years, increasing from 12.86% in 2020 to 15.05% in 2024. This indicates that the company has been more efficient in generating returns from its total capital investment. The peak return on total capital was observed in 2023 at 21.32%, demonstrating strong performance and effective allocation of resources. Despite a slight dip in 2024, the company's return on total capital remains at a healthy level, suggesting that Synopsys Inc continues to effectively utilize its capital to generate profits. This trend indicates a positive outlook for the company's financial performance and operational efficiency.