Alcoa Corp (AA)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 877,000 | -584,000 | 702,000 | 1,199,000 | 173,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 5,159,000 | 4,251,000 | 5,076,000 | 4,672,000 | 3,311,000 |
| Return on total capital | 17.00% | -13.74% | 13.83% | 25.66% | 5.23% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $877,000K ÷ ($—K + $5,159,000K)
= 17.00%
The return on total capital for Alcoa Corp has experienced fluctuations over the past five years. In December 31, 2020, the return on total capital was 5.23%, indicating a relatively low profitability compared to the following years. By December 31, 2021, the return on total capital significantly increased to 25.66%, reflecting a substantial improvement in the company's capital efficiency and profitability.
In December 31, 2022, the return on total capital declined to 13.83%, indicating a decrease in the company's efficiency in generating returns from its total capital compared to the previous year. However, in December 31, 2024, the return on total capital rebounded to 17.00%, showing a recovery in profitability.
Notably, in December 31, 2023, the return on total capital turned negative at -13.74%, signifying that the company incurred losses relative to its total capital during that period. It is essential for Alcoa Corp to focus on improving its capital utilization and operational efficiency to maintain and enhance its profitability in the future.
Peer comparison
Dec 31, 2024