Aecom Technology Corporation (ACM)
Return on total capital
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 324,134 | 646,804 | 629,553 | 381,461 | 396,096 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 2,212,330 | 2,476,650 | 2,712,470 | 3,292,560 | 3,690,580 |
| Return on total capital | 14.65% | 26.12% | 23.21% | 11.59% | 10.73% |
September 30, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $324,134K ÷ ($—K + $2,212,330K)
= 14.65%
AECOM's return on total capital (ROTC) measures the efficiency with which the company generates profits from the total capital employed, including both equity and debt. The trend of AECOM's ROTC over the past five years reflects its ability to generate returns relative to its overall capital base.
In 2023, AECOM's ROTC stood at 11.61%, showing a decrease from the previous year. This suggests a lower return generated for every dollar of total capital compared to the prior period. However, this level of ROTC still indicates a reasonable return relative to the capital invested.
In 2022, AECOM's ROTC was 16.11%, showcasing a strong performance in generating returns from its total capital. This indicates efficient utilization of capital to drive profits during this year.
In 2021, the ROTC was 13.78%, reflecting a slightly lower return compared to 2022 but still demonstrating a proficient use of total capital to generate profits.
In 2020, AECOM achieved a ROTC of 10.64%, indicating a moderate return on its total capital relative to the prior year. This suggests a need for improving the efficiency of capital utilization during this period.
In 2019, AECOM's ROTC was 10.52%, showing a similar level of efficiency in generating returns as in 2020, without a significant change in performance.
Overall, AECOM's ROTC has shown some fluctuations, but the company has generally demonstrated an effective use of capital to generate profits over the five-year period. The recent decrease in ROTC may prompt a closer evaluation of the company's capital allocation strategies to ensure sustained profitability and efficient use of total capital in the future.
Peer comparison
Sep 30, 2023