Alcoa Corp (AA)
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 | -541,000 | -572,000 | -1,076,000 | -210,000 | 647,000 | 770,000 | 1,973,000 | 1,647,000 | 1,253,000 | 1,378,000 | 890,000 | 283,000 | 163,000 | -114,000 | -244,000 | -380,000 | -589,000 | -126,000 | 257,000 | 713,000 |
| Long-term debt | US$ in thousands | 1,732,000 | 1,809,000 | 1,808,000 | 1,806,000 | 1,806,000 | 1,725,000 | 1,725,000 | 1,727,000 | 1,726,000 | 1,724,000 | 2,216,000 | 2,214,000 | 2,463,000 | 2,538,000 | 1,800,000 | 1,801,000 | 1,799,000 | 1,805,000 | 1,804,000 | 1,802,000 |
| Total stockholders’ equity | US$ in thousands | 4,251,000 | 4,509,000 | 4,842,000 | 4,690,000 | 5,076,000 | 5,371,000 | 5,666,000 | 4,579,000 | 4,672,000 | 3,878,000 | 3,769,000 | 3,248,000 | 3,311,000 | 3,395,000 | 3,705,000 | 4,275,000 | 4,112,000 | 4,539,000 | 4,895,000 | 5,157,000 |
| Return on total capital | -9.04% | -9.05% | -16.18% | -3.23% | 9.40% | 10.85% | 26.69% | 26.12% | 19.58% | 24.60% | 14.87% | 5.18% | 2.82% | -1.92% | -4.43% | -6.25% | -9.96% | -1.99% | 3.84% | 10.25% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-541,000K ÷ ($1,732,000K + $4,251,000K)
= -9.04%
The return on total capital for Alcoa Corp has exhibited fluctuations in recent quarters. In Q4 2023, the return was -6.38%, deteriorating from the previous quarter's -7.34%. This decline in performance may raise concerns about the company's efficiency in generating returns from its total capital.
The return on total capital was negative in Q4 2023 and Q3 2023, indicating that the company may not be effectively utilizing its capital to generate profits. In contrast, the return was significantly higher in the earlier quarters of 2022, with Q1 2022 showing the highest return at 42.05%. This suggests that Alcoa Corp had previously demonstrated strong capital efficiency and profitability.
The downward trend in return on total capital from Q1 2023 to Q4 2023 may prompt further investigation into the factors impacting Alcoa Corp's financial performance and capital utilization. It is essential for the company to address the declining trend to ensure sustainable profitability and efficient use of its total capital in the future.
Peer comparison
Dec 31, 2023