Texas Instruments Incorporated (TXN)
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 | 7,331,000 | 7,974,000 | 8,760,000 | 9,511,000 | 10,140,000 | 10,467,000 | 10,094,000 | 9,584,000 | 8,960,000 | 8,270,000 | 7,574,000 | 6,589,000 | 5,894,000 | 5,330,000 | 5,310,000 | 5,588,000 | 5,723,000 | 5,990,000 | 6,338,000 | 6,544,000 |
| Long-term debt | US$ in thousands | 10,624,000 | 10,922,000 | 10,920,000 | 9,626,000 | 8,235,000 | 7,438,000 | 6,745,000 | 7,242,000 | 7,241,000 | 7,239,000 | 5,752,000 | 6,250,000 | 6,248,000 | 6,247,000 | 6,245,000 | 5,499,000 | 5,303,000 | 5,302,000 | 4,558,000 | 5,057,000 |
| Total stockholders’ equity | US$ in thousands | 16,897,000 | 16,631,000 | 15,940,000 | 15,243,000 | 14,577,000 | 14,507,000 | 14,092,000 | 14,017,000 | 13,333,000 | 12,151,000 | 11,153,000 | 10,166,000 | 9,187,000 | 8,325,000 | 7,644,000 | 7,734,000 | 8,907,000 | 8,985,000 | 8,486,000 | 8,519,000 |
| Return on total capital | 26.64% | 28.94% | 32.61% | 38.24% | 44.45% | 47.70% | 48.44% | 45.08% | 43.55% | 42.65% | 44.80% | 40.14% | 38.19% | 36.58% | 38.23% | 42.23% | 40.27% | 41.93% | 48.59% | 48.20% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $7,331,000K ÷ ($10,624,000K + $16,897,000K)
= 26.64%
Analyzing Texas Instruments Inc.'s return on total capital over the past eight quarters reveals a decreasing trend in the company's performance. The return on total capital has declined from 44.60% in Q4 2022 to 26.07% in Q4 2023. This indicates a reduction in the efficiency of the company in generating returns relative to its total capital employed.
The consistent decline in return on total capital suggests potential challenges in utilizing the company's resources effectively to generate profits. Investors and stakeholders may view this trend as concerning, as it indicates decreasing profitability and efficiency in converting capital into returns.
It is essential for Texas Instruments Inc. to investigate the underlying reasons for the declining trend in return on total capital and take corrective measures to improve its performance and maintain the confidence of investors and stakeholders.
Peer comparison
Dec 31, 2023