Vir Biotechnology Inc (VIR)

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	-684,305	833,068	420,751	-296,980	-177,979
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	1,590,240	2,077,960	1,431,850	716,852	423,942
Return on total capital		-43.03%	40.09%	29.39%	-41.43%	-41.98%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-684,305K ÷ ($—K + $1,590,240K)
= -43.03%

Return on total capital is a key financial ratio that indicates the efficiency and profitability of a company in generating returns from its total capital employed. In the case of Vir Biotechnology Inc, the trend in return on total capital has been fluctuating over the past five years.

In 2019 and 2020, the company experienced negative returns on total capital, indicating that it was not effectively utilizing its total capital to generate profits during those years. However, in 2021 and 2022, there was a significant improvement in the return on total capital, with the company achieving positive returns of 29.39% and 40.09%, respectively. This suggests that Vir Biotechnology Inc was able to generate meaningful profits relative to the total capital invested during these years.

However, in 2023, the return on total capital dropped significantly to -43.03%, indicating a decline in the company's ability to generate returns from its total capital. This decrease may raise concerns about the company's profitability and efficiency in utilizing its capital effectively.

Overall, the fluctuating trend in Vir Biotechnology Inc's return on total capital over the past five years suggests volatility in the company's financial performance and the need for closer monitoring to ensure sustained profitability and efficient capital utilization in the future.