Teradata Corp (TDC)

Return on total capital

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	147,000	91,000	218,000	3,000	13,000
Long-term debt	US$ in thousands	480,000	498,000	324,000	411,000	454,000
Total stockholders’ equity	US$ in thousands	135,000	258,000	460,000	400,000	262,000
Return on total capital		23.90%	12.04%	27.81%	0.37%	1.82%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $147,000K ÷ ($480,000K + $135,000K)
= 23.90%

Return on total capital is a key financial metric that indicates how efficiently a company is utilizing all of its available capital to generate profits. Teradata Corp's return on total capital has fluctuated over the past five years. In 2023, the company achieved a return on total capital of 24.38%, indicating a significant increase compared to the previous year. This improvement suggests that Teradata Corp has been able to generate higher profits relative to the total capital employed in the business.

In 2022, the return on total capital was 13.45%, showing a moderate performance compared to 2023 but representing an increase from 2021. The company's return on total capital was notably higher in 2021 at 23.05%, indicating a strong performance and efficient capital utilization during that period.

However, in both 2020 and 2019, Teradata Corp's return on total capital was significantly lower at 1.60% and 1.15% respectively. These lower figures suggest that the company may have faced challenges in generating profits relative to the total capital invested during those years.

Overall, Teradata Corp's return on total capital has shown variability over the years, with a notable improvement in 2023. A consistently high return on total capital can indicate efficient management of capital and a strong performance in generating profits.