Teradyne Inc (TER)
Return on total capital
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 454,288 | 594,906 | 580,357 | 504,871 | 529,379 | 585,013 | 666,558 | 769,092 | 852,392 | 921,786 | 996,538 | 1,141,548 | 1,185,450 | 1,130,971 | 1,068,157 | 929,474 | 902,958 | 851,557 | 760,993 | 630,308 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 3,708,710 | 2,902,540 | 2,730,810 | 2,557,830 | 2,525,900 | 2,441,300 | 2,434,880 | 2,449,460 | 2,451,290 | 2,254,120 | 2,298,600 | 2,474,530 | 2,568,690 | 2,537,490 | 2,493,260 | 2,324,550 | 2,207,020 | 1,993,540 | 1,744,550 | 1,550,670 |
| Return on total capital | 12.25% | 20.50% | 21.25% | 19.74% | 20.96% | 23.96% | 27.38% | 31.40% | 34.77% | 40.89% | 43.35% | 46.13% | 46.15% | 44.57% | 42.84% | 39.99% | 40.91% | 42.72% | 43.62% | 40.65% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $454,288K ÷ ($—K + $3,708,710K)
= 12.25%
Teradyne Inc's return on total capital has shown fluctuations over the periods provided in the data. The return on total capital started at a high of 40.65% as of March 31, 2020, and gradually increased to peak at 46.15% by December 31, 2021. This upward trend reflected positively on the company's ability to generate profits relative to the total capital employed.
However, from March 31, 2022, the return on total capital began to decline, reaching 12.25% by December 31, 2024. This downward trend indicates a decreasing efficiency in generating profits from the total capital employed in the business.
Overall, the decreasing trend in return on total capital from late 2021 to the end of 2024 suggests a potential concern regarding the company's ability to effectively utilize its total capital to generate returns for its stakeholders. Further analysis of the business operations and financial strategies may be needed to address this decline in performance.
Peer comparison
Dec 31, 2024