Alcoa Corp (AA)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -355,000 | 647,000 | 1,253,000 | 163,000 | -589,000 |
| Long-term debt | US$ in thousands | 1,732,000 | 1,806,000 | 1,726,000 | 2,463,000 | 1,799,000 |
| Total stockholders’ equity | US$ in thousands | 4,251,000 | 5,076,000 | 4,672,000 | 3,311,000 | 4,112,000 |
| Return on total capital | -5.93% | 9.40% | 19.58% | 2.82% | -9.96% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-355,000K ÷ ($1,732,000K + $4,251,000K)
= -5.93%
Alcoa Corp's return on total capital has displayed variability in recent years, indicating fluctuations in the company's ability to generate returns on the total capital employed in its operations. In 2023, the return on total capital stands at -6.38%, reflecting a negative return being generated. This contrasts sharply with the 19.74% return in 2022 and the significantly higher return of 32.46% in 2021, indicating a substantial decline in profitability in the most recent period.
The return on total capital in 2020 was 6.67%, showing a moderate level of return, while in 2019, it stood at 13.99%, a figure higher than that of 2020 but lower than the returns in 2021 and 2022. This trend suggests that the company's performance has been inconsistent in terms of generating returns on total capital.
The negative return in 2023 may raise concerns regarding the company's operational efficiency and profitability. Further analysis would be necessary to understand the factors contributing to this decline and to assess the company's overall financial health and performance.
Peer comparison
Dec 31, 2023