Cadence Design Systems (BSP:C1DN34) ROCE %

: 35.86% (As of Dec. 2023)

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ROCE % measures how well a company generates profits from its capital. It is calculated as EBIT divided by Capital Employed, where Capital Employed is calculated as Total Assets minus Total Current Liabilities. Cadence Design Systems's annualized ROCE % for the quarter that ended in Dec. 2023 was 35.86%.

Cadence Design Systems ROCE % Historical Data

The historical data trend for Cadence Design Systems's ROCE % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Cadence Design Systems Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROCE %

22.89

24.68

25.00

28.60

32.40

Cadence Design Systems Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROCE %																23.43	33.90	29.83	30.68	35.86

Cadence Design Systems ROCE % Calculation

Cadence Design Systems's annualized ROCE % for the fiscal year that ended in Dec. 2023 is calculated as:

ROCE %	=	EBIT	/	( (Capital Employed	+	Capital Employed)	/ count )
		(A: Dec. 2023 )		(A: Dec. 2022 )		(A: Dec. 2023 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(A: Dec. 2023 )		(A: Dec. 2022 )		(A: Dec. 2023 )
	=	6458.48	/	( ( (26945.992 - 7069.205)	+	(27779.372 - 7794.93) )	/ 2 )
	=	6458.48	/	( (19876.787	+	19984.442)	/ 2 )
	=	6458.48	/	19930.6145
	=	32.40 %

Cadence Design Systems's ROCE % of for the quarter that ended in Dec. 2023 is calculated as:

ROCE %	=	EBIT ⁽¹⁾	/	( (Capital Employed	+	Capital Employed)	/ count )
		(Q: Dec. 2023 )		(Q: Sep. 2023 )		(Q: Dec. 2023 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(Q: Dec. 2023 )		(Q: Sep. 2023 )		(Q: Dec. 2023 )
	=	7272.304	/	( ( (26823.932 - 6243.342)	+	(27779.372 - 7794.93) )	/ 2 )
	=	7272.304	/	( ( 20580.59	+	19984.442 )	/ 2 )
	=	7272.304	/	20282.516
	=	35.86 %

(1) Note: The EBIT data used here is four times the quarterly (Dec. 2023) EBIT data.

Cadence Design Systems (BSP:C1DN34) ROCE % Explanation

ROCE % can be especially useful when comparing the performance of capital-intensive companies. Unlike ROE %, which indicates the profitability of Shareholders Equity, ROCE % also considers long-term debt in Capital Employed. This can be helpful when analyzing companies with significant debt, as the result is neutralized by taking debt into consideration.

Generally speaking, a higher ROCE % indicates a stonger profitability for a company. Moreover, it is important to look at the ratio from a long term perspective. Investors tend to favor companies with stable and rising ROCE % trend over those with volatile ones.

Cadence Design Systems ROCE % Related Terms

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Cadence Design Systems (BSP:C1DN34) Business Description

Industry

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Address

2655 Seely Avenue, Building 5, San Jose, CA, USA, 95134

Website

https://www.cadence.com

Cadence Design Systems is a provider of electronic design automation software, intellectual property, and system design and analysis products. EDA software automates the chip design process, enhancing design accuracy, productivity, and complexity in a full-flow end-to-end solution. Cadence offers a portfolio of design IP, as well as system design and analysis products, which enable system-level analysis and verification solutions. Cadence's comprehensive portfolio is benefiting from a mutual convergence of semiconductor companies moving up-stack toward systems-like companies, and systems companies moving down-stack toward in-house semiconductor design. The resulting expansion in EDA customers, alongside secular digitalization of various end markets, benefits EDA vendors like Cadence.

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