Synopsys Inc (SNPS)

Return on total capital

		Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	1,314,720	1,123,370	810,036	644,199	557,165
Long-term debt	US$ in thousands	18,078	20,824	25,094	100,823	120,093
Total stockholders’ equity	US$ in thousands	6,147,310	5,515,720	5,295,140	4,907,400	4,083,010
Return on total capital		21.32%	20.29%	15.23%	12.86%	13.26%

October 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,314,720K ÷ ($18,078K + $6,147,310K)
= 21.32%

The return on total capital for Synopsys, Inc. has exhibited a positive trend over the past five years, indicating improving efficiency in generating profits relative to the total capital employed. The 21.84% return recorded as of October 31, 2023, represents a significant increase from 21.21% in the previous year and a substantial improvement from 13.44% in 2019. This trend suggests that the company has been effectively utilizing its total capital to generate returns for shareholders. Furthermore, the consistently increasing return on total capital signifies the company's ability to efficiently deploy its resources and generate higher profits, reflecting positively on its operational and financial management.