Vir Biotechnology Inc (VIR)

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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-684,305	-695,791	-314,095	-324,131	833,070	1,555,324	1,306,975	1,593,214	420,751	-259,405	-293,635	-383,703	-296,980	-252,335	-212,400
Long-term debt	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	1,590,240	1,675,080	1,810,210	1,970,760	2,077,960	2,149,860	1,952,010	2,001,010	1,431,850	876,274	737,325	650,951	716,852	812,355	563,779	380,333	423,942	-280,797
Return on total capital		-43.03%	-41.54%	-17.35%	-16.45%	40.09%	72.35%	66.96%	79.62%	29.39%	-29.60%	-39.82%	-58.94%	-41.43%	-31.06%	-37.67%

December 31, 2023 calculation

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

Vir Biotechnology Inc's return on total capital has shown significant fluctuations over the past eight quarters. The return on total capital was negative during the most recent two quarters, Q4 2023 and Q3 2023, at -43.03% and -41.54% respectively, indicating that the company is generating a lower return relative to its total capital base. This negative trend continued from the positive returns seen in the previous quarters of 2022.

The return on total capital experienced a sharp decline in Q2 2023 at -17.35% compared to the previous quarter, Q1 2023, at -16.45%. This downward trend contrasts with the robust performance in 2022, where the return on total capital exceeded 40% in each quarter.

The substantial decrease in the return on total capital in 2023 raises concerns about the company's ability to efficiently utilize its capital resources to generate profits. Investors and stakeholders may closely monitor future financial performance to assess the company's strategic direction and operational efficiency.