Varex Imaging Corp (VREX)
Return on total capital
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 32,100 | 60,100 | 83,800 | 70,200 | -41,700 |
| Long-term debt | US$ in thousands | 397,100 | 441,100 | 412,300 | 431,700 | 452,800 |
| Total stockholders’ equity | US$ in thousands | 535,100 | 567,700 | 533,400 | 483,300 | 451,700 |
| Return on total capital | 3.44% | 5.96% | 8.86% | 7.67% | -4.61% |
September 30, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $32,100K ÷ ($397,100K + $535,100K)
= 3.44%
The return on total capital for Varex Imaging Corp has shown a declining trend over the past five years, from -4.61% in 2020 to 3.44% in 2024. This indicates that the company's ability to generate profits from its total capital employed has been decreasing. The decrease in return on total capital could be a cause for concern as it signifies a lower efficiency in utilizing the company's total capital to generate earnings. It is important for Varex Imaging Corp to address and improve this trend to ensure sustainable and profitable operations in the future.
Peer comparison
Sep 30, 2024