Ultra Clean Holdings Inc (UCTT)

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	28,600	112,200	171,600	113,800	26,200
Long-term debt	US$ in thousands	461,200	493,000	529,900	261,600	283,400
Total stockholders’ equity	US$ in thousands	838,900	887,900	848,900	532,600	436,700
Return on total capital		2.20%	8.13%	12.45%	14.33%	3.64%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $28,600K ÷ ($461,200K + $838,900K)
= 2.20%

Ultra Clean Holdings Inc's return on total capital has fluctuated over the past five years. In 2023, the return on total capital decreased to 2.20%, significantly lower than the previous year's 8.13%. This downward trend is also evident when comparing to the higher returns in 2021 and 2020, which were 12.45% and 14.33% respectively. The return on total capital in 2019 was at 3.64%, showing a relatively lower performance compared to the recent years.

Overall, the decreasing trend in return on total capital indicates a potential decline in the efficiency of Ultra Clean Holdings Inc in generating profits from its total capital over the years, which may raise concerns regarding the company's ability to effectively utilize its resources to generate returns for its investors.