Viavi Solutions Inc (VIAV)

Return on total capital

		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	Dec 31, 2019	Sep 30, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	38,800	59,000	64,200	63,100	87,800	120,300	158,000	176,900	88,400	76,600	76,600	76,000	145,500	133,600	113,000	115,900	107,400	114,000	108,400	94,100
Long-term debt	US$ in thousands	636,000	634,400	632,800	631,100	629,500	—	617,200	—	616,500	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	681,600	705,100	728,000	675,200	690,800	682,300	687,800	648,400	671,700	709,900	774,800	858,600	763,900	749,800	733,600	681,000	633,200	676,900	764,300	708,100
Return on total capital		2.94%	4.40%	4.72%	4.83%	6.65%	17.63%	12.11%	27.28%	6.86%	10.79%	9.89%	8.85%	19.05%	17.82%	15.40%	17.02%	16.96%	16.84%	14.18%	13.29%

June 30, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $38,800K ÷ ($636,000K + $681,600K)
= 2.94%

Viavi Solutions Inc's return on total capital has shown some variability over the periods provided. The return on total capital ranged from a low of 2.94% in Jun 30, 2024, to a high of 27.28% in Sep 30, 2022. Generally, the return on total capital has been fluctuating within a range, indicating some inconsistencies in the company's ability to generate returns on its total invested capital.

The return on total capital was particularly strong in Q4 2022 and Q1 2023, with values of 27.28% and 17.63% respectively, indicating efficient utilization of both debt and equity in generating profits during these periods. However, the return on total capital in the recent quarters seems to have decreased, reflecting a potential decline in profitability or efficiency in capital utilization.

It is important for Viavi Solutions Inc to evaluate the factors contributing to the fluctuations in return on total capital and take appropriate actions to sustain or improve this key financial metric in order to maximize shareholder value and ensure long-term financial stability.