Synopsys Inc (SNPS)

Return on total capital

		Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020	Oct 31, 2019	Jul 31, 2019	Apr 30, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	1,501,659	1,314,723	1,116,508	1,031,460	1,077,678	1,123,370	1,109,391	1,083,966	959,967	810,038	802,802	826,249	721,183	644,199	583,657	480,987	506,733	557,166	481,066	422,392
Long-term debt	US$ in thousands	16,951	18,078	18,165	20,201	20,569	20,824	21,960	23,775	24,370	25,094	24,754	25,620	25,658	100,823	107,104	114,370	122,516	120,093	125,285	126,152
Total stockholders’ equity	US$ in thousands	6,670,980	6,147,310	5,958,560	5,831,860	5,636,750	5,515,720	5,604,030	5,564,310	5,386,770	5,295,140	5,151,020	5,088,140	4,882,250	4,907,400	4,595,920	4,275,090	4,148,830	4,083,010	3,933,810	3,909,570
Return on total capital		22.45%	21.32%	18.68%	17.63%	19.05%	20.29%	19.72%	19.40%	17.74%	15.23%	15.51%	16.16%	14.69%	12.86%	12.41%	10.96%	11.86%	13.26%	11.85%	10.47%

January 31, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $1,501,659K ÷ ($16,951K + $6,670,980K)
= 22.45%

Based on the data provided, Synopsys, Inc.'s return on total capital has remained relatively stable over the past eight quarters. The return on total capital ranged from a low of 17.76% in Q2 2023 to a high of 21.84% in Q4 2023, with an average of around 20% during this period.

A return on total capital above 20% indicates that Synopsys, Inc. is generating a significant return relative to the total capital employed in the business. This suggests that the company is efficiently utilizing both its debt and equity to generate profits.

Overall, the consistency and relatively high levels of return on total capital for Synopsys, Inc. indicate that the company is effectively managing its capital structure and investments to generate favorable returns for its shareholders.