American Airlines Group (AAL)

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	3,266,000	4,257,000	5,567,000	4,327,000	2,147,000	-118,000	-593,000	-1,169,000	-748,000	-2,458,000	-5,895,000	-8,795,000	-10,226,000	-6,957,000	-3,361,000	201,000	3,350,000	3,178,000	3,095,000	2,957,000
Long-term debt	US$ in thousands	3,700,000	3,700,000	34,057,000	34,459,000	34,903,000	36,158,000	36,354,000	37,093,000	37,323,000	31,911,000	39,421,000	39,124,000	32,021,000	32,203,000	27,307,000	23,181,000	23,645,000	24,559,000	22,621,000	22,075,000
Total stockholders’ equity	US$ in thousands	-5,202,000	-5,136,000	-4,385,000	-5,771,000	-5,799,000	-7,893,000	-8,422,000	-8,940,000	-7,340,000	-7,437,000	-7,667,000	-7,945,000	-6,867,000	-5,528,000	-3,169,000	-2,636,000	-118,000	160,000	-22,000	-636,000
Return on total capital		—	—	18.76%	15.08%	7.38%	-0.42%	-2.12%	-4.15%	-2.49%	-10.04%	-18.56%	-28.21%	-40.65%	-26.08%	-13.92%	0.98%	14.24%	12.86%	13.70%	13.79%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $3,266,000K ÷ ($3,700,000K + $-5,202,000K)
= —

American Airlines Group Inc's return on total capital has displayed fluctuations over the past eight quarters. In Q4 2023, the return on total capital stood at 14.46%, showing a slight decrease from Q3 2023's 16.67%. Despite the dip, the return remains relatively strong compared to previous quarters, indicating efficient utilization of both debt and equity to generate profits.

Looking further back, Q2 2023 and Q1 2023 also recorded favorable returns on total capital of 16.42% and 12.99%, respectively. These results suggest that the company has been successful in generating profits relative to the total capital employed during these periods.

In comparison, Q4 2022 and Q3 2022 witnessed lower returns of 6.03% and -1.33% respectively, indicating challenges faced by the company in those quarters in generating profits from its capital base. The negative return in Q3 2022 suggests that the company's capital deployment strategies may not have been optimal during that period.

The trend continued in earlier quarters, with Q2 2022 and Q1 2022 showing negative returns on total capital at -6.11% and -12.48%, respectively. These figures indicate significant challenges faced by American Airlines Group Inc in effectively utilizing its capital resources to generate profits during those quarters.

Overall, the recent quarters have demonstrated an improvement in American Airlines Group Inc's return on total capital, indicating enhanced efficiency in capital utilization and potential for sustainable profitability. Monitoring this ratio over time will be crucial to assess the company's financial performance and capital management strategies.