Sonos Inc (SONO)
Return on total capital
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -48,046 | 5,127 | 69,282 | 157,517 | -18,596 |
| Long-term debt | US$ in thousands | — | — | — | 0 | 18,251 |
| Total stockholders’ equity | US$ in thousands | 428,620 | 518,657 | 560,513 | 569,042 | 297,839 |
| Return on total capital | -11.21% | 0.99% | 12.36% | 27.68% | -5.88% |
September 30, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-48,046K ÷ ($—K + $428,620K)
= -11.21%
Sonos Inc's return on total capital has shown significant fluctuations over the past five years. In 2024, the return on total capital was negative at -11.21%, indicating that the company's capital investment did not yield positive returns during that period. This is in stark contrast to the positive returns seen in the previous years, with the highest return recorded in 2021 at 27.68%.
The decreasing trend in return on total capital from 2021 to 2024 raises concerns about the company's ability to generate returns on its overall capital investment. The negative return in 2024 may suggest inefficiencies in managing the company's capital resources or challenges in generating profits from investments.
It is important for Sonos Inc to closely evaluate its capital allocation strategies and operational efficiency to improve its return on total capital and enhance overall financial performance in the future. Regular monitoring and analysis of this key financial metric will be essential for sustainable growth and profitability.
Peer comparison
Sep 30, 2024