Wolfspeed Inc (WOLF)

Return on total capital

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	-445,300	-285,900	-166,800	-477,400	-164,800
Long-term debt	US$ in thousands	6,161,100	4,175,100	1,021,600	823,900	783,800
Total stockholders’ equity	US$ in thousands	882,100	1,621,900	2,439,300	2,116,500	2,083,100
Return on total capital		-6.32%	-4.93%	-4.82%	-16.24%	-5.75%

June 30, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-445,300K ÷ ($6,161,100K + $882,100K)
= -6.32%

The return on total capital for Wolfspeed Inc has been fluctuating over the past five years. It ranged from -16.24% in Jun 30, 2021 to -4.82% in Jun 30, 2022. The negative returns indicate that the company has not been effectively utilizing its total capital to generate profits. This may suggest inefficiencies in the company's operations or capital allocation decisions. It is important for Wolfspeed Inc to improve its return on total capital in order to enhance shareholder value and ensure sustainable long-term growth.