Xencor Inc (XNCR)

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	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-138,639	-146,223	-166,303	-168,306	-82,475	51,770	48,818	85,905	43,767	-61,583	-37,005	-83,692	-76,797	-93,671	-91,225	-73,197	13,824	23,314	38,241	29,523
Long-term debt	US$ in thousands	14,642	—	—	—	0	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	668,796	669,010	678,876	683,583	727,496	722,698	742,341	763,023	733,504	618,860	646,938	583,612	572,444	568,483	570,645	593,005	593,201	610,237	608,091	609,565
Return on total capital		-20.29%	-21.86%	-24.50%	-24.62%	-11.34%	7.16%	6.58%	11.26%	5.97%	-9.95%	-5.72%	-14.34%	-13.42%	-16.48%	-15.99%	-12.34%	2.33%	3.82%	6.29%	4.84%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-138,639K ÷ ($14,642K + $668,796K)
= -20.29%

Return on total capital is a key financial ratio that indicates the efficiency of a company in generating profits from all the capital invested in the business, including both equity and debt.

Based on the provided data for Xencor Inc, the return on total capital has shown a declining trend over the past eight quarters. The ratio has ranged from -24.62% in Q1 2023 to a peak of 11.26% in Q1 2022.

The negative values in Q1 to Q4 2023 indicate that the company's profits are not sufficient to cover the total capital employed in the business during those quarters. This could suggest inefficiency or poor performance in utilizing the capital to generate returns for shareholders and debt holders.

On the other hand, the positive values in Q1 and Q2 2022 show that the company was able to generate returns that exceeded the total capital invested in the business during those periods. This indicates a more favorable situation where the company is efficiently utilizing its capital to generate profits.

Overall, the declining trend in return on total capital for Xencor Inc over the analyzed periods may raise concerns about the company's profitability and capital efficiency. Further analysis of the company's operational performance, capital structure, and strategic initiatives would be necessary to understand the underlying factors contributing to these fluctuations in the ratio.