Teradyne Inc (TER)
Return on total capital
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 529,378 | 585,013 | 666,746 | 760,804 | 844,104 | 905,499 | 980,063 | 1,130,150 | 1,178,776 | 1,150,405 | 1,118,833 | 952,575 | 925,198 | 850,249 | 737,477 | 651,120 | 547,999 | 517,982 | 507,184 | 495,858 |
| Long-term debt | US$ in thousands | — | — | — | — | 0 | — | — | — | 89,244 | — | — | — | 376,768 | 406,178 | 402,305 | 398,466 | 394,687 | 390,942 | 387,243 | 383,590 |
| Total stockholders’ equity | US$ in thousands | 2,525,900 | 2,441,300 | 2,434,880 | 2,449,460 | 2,451,290 | 2,254,120 | 2,298,600 | 2,474,530 | 2,562,440 | 2,537,490 | 2,493,260 | 2,324,550 | 2,207,020 | 1,993,540 | 1,744,550 | 1,550,670 | 1,480,160 | 1,482,640 | 1,479,410 | 1,470,230 |
| Return on total capital | 20.96% | 23.96% | 27.38% | 31.06% | 34.44% | 40.17% | 42.64% | 45.67% | 44.45% | 45.34% | 44.87% | 40.98% | 35.81% | 35.43% | 34.35% | 33.41% | 29.23% | 27.65% | 27.17% | 26.75% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $529,378K ÷ ($—K + $2,525,900K)
= 20.96%
Teradyne, Inc.'s return on total capital has shown a declining trend over the past eight quarters based on the data provided. The company's return on total capital decreased from 46.13% in Q1 2022 to 20.68% in Q4 2023. This suggests a possible decline in the efficiency of capital utilization by the company in generating profits.
The decreasing trend in return on total capital could be a cause for concern as it indicates that the company may be becoming less effective in utilizing its total capital to generate profits. It is important for investors and stakeholders to closely monitor this ratio to understand the reasons behind the decline and assess the overall financial health and performance of Teradyne, Inc.
Peer comparison
Dec 31, 2023