American Airlines Group (AAL)
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 | 2,614,000 | 3,266,000 | 2,148,000 | -748,000 | -10,226,000 |
| Long-term debt | US$ in thousands | 29,813,000 | 3,700,000 | 34,903,000 | 37,323,000 | 32,021,000 |
| Total stockholders’ equity | US$ in thousands | -3,977,000 | -5,202,000 | -5,799,000 | -7,340,000 | -6,867,000 |
| Return on total capital | 10.12% | — | 7.38% | -2.49% | -40.65% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $2,614,000K ÷ ($29,813,000K + $-3,977,000K)
= 10.12%
American Airlines Group's return on total capital has demonstrated significant fluctuations over the past few years. The company reported a notably low return on total capital of -40.65% as of December 31, 2020, indicating that the company's capital investments did not generate sufficient returns to cover its overall cost of capital. However, there was an improvement in the following year, with the return on total capital increasing to -2.49% as of December 31, 2021.
By December 31, 2022, the return on total capital showed a positive trend, reaching 7.38%, suggesting that the company was able to generate returns that exceeded its total capital investment. This uptrend continued into the next year, with a return on total capital of 10.12% as of December 31, 2024, indicating further improvement and potentially increased efficiency in capital utilization.
It should be noted that there is missing data for December 31, 2023, which may have been a transitional period for the company. Overall, the fluctuating return on total capital highlights the variability in American Airlines Group's ability to generate returns from its capital investments, underscoring the importance of closely monitoring and assessing the company's capital allocation strategies.
Peer comparison
Dec 31, 2024