Teradyne Inc (TER)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | — | 501,068 | 844,104 | 1,178,780 | 925,197 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 3,708,710 | 2,525,900 | 2,451,290 | 2,568,690 | 2,207,020 |
| Return on total capital | 0.00% | 19.84% | 34.44% | 45.89% | 41.92% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $—K ÷ ($—K + $3,708,710K)
= 0.00%
Teradyne Inc's return on total capital has shown fluctuations over the years. In December 31, 2020, the return on total capital stood at a healthy 41.92%, which increased to 45.89% by December 31, 2021, indicating an improved efficiency in generating profits relative to total invested capital. However, there was a decline in return on total capital to 34.44% by December 31, 2022, which may suggest a potential decrease in profitability or increased capital base.
The return on total capital dropped significantly to 19.84% by December 31, 2023, which could be a concern as it indicates a lower return on the total capital employed by the company. Furthermore, the return on total capital plummeted to 0.00% by December 31, 2024, which is a point of major concern as it signifies that the company might not be generating any profits relative to the total capital invested.
Overall, the trend in the return on total capital for Teradyne Inc showcases variability and a declining pattern in recent years, signaling potential challenges in generating returns relative to the total capital employed. Further analysis of the company's financial performance and strategic decisions may be required to address the decreasing trend in the return on total capital.
Peer comparison
Dec 31, 2024