Viavi Solutions Inc (VIAV)

Return on total capital

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Earnings before interest and tax (EBIT)	US$ in thousands	68,600	42,500	84,600	88,400	145,500
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	780,200	681,600	690,800	671,700	763,900
Return on total capital		8.79%	6.24%	12.25%	13.16%	19.05%

June 30, 2025 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $68,600K ÷ ($—K + $780,200K)
= 8.79%

The data indicates that Viavi Solutions Inc. experienced a significant decline in its return on total capital over the period from June 30, 2021, to June 30, 2024. Specifically, the return was 19.05% as of June 30, 2021, which declined to 13.16% by June 30, 2022, representing a reduction of approximately 5.89 percentage points. This downward trend continued into the following year, with the return decreasing further to 12.25% by June 30, 2023, a decline of 0.91 percentage points. By June 30, 2024, the return on total capital had fallen sharply to 6.24%, indicating a considerable erosion in profitability relative to the company's total capital base.

However, a partial recovery is observed in the subsequent year, with the return improving to 8.79% as of June 30, 2025. This suggests some degree of operational or financial restructuring efforts might have been undertaken, or market conditions improved, enabling the company to enhance its efficiency in generating returns on its total capital base.

Overall, the trend from 2021 through 2024 reflects a substantial decline in the company's ability to generate returns on its total capital, dropping from nearly 19% to approximately 6.24%, which could signal deteriorations in operational performance, changes in capital structure, or external market pressures. The slight rebound in 2025 warrants further analysis to understand underlying factors contributing to this recovery.