Ameren Corp (AEE)
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 | 1,558,000 | 1,515,000 | 1,333,000 | 1,300,000 | 1,267,000 |
| Long-term debt | US$ in thousands | 15,121,000 | 13,685,000 | 12,562,000 | 11,078,000 | 8,915,000 |
| Total stockholders’ equity | US$ in thousands | 11,349,000 | 10,508,000 | 9,700,000 | 8,938,000 | 8,059,000 |
| Return on total capital | 5.89% | 6.26% | 5.99% | 6.49% | 7.46% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,558,000K ÷ ($15,121,000K + $11,349,000K)
= 5.89%
Ameren Corp.'s return on total capital has shown a declining trend over the past five years. The return on total capital was 5.59% in 2023, down from 5.93% in 2022 and 7.10% in 2019. This indicates a reduction in the efficiency of the company in generating profits from its total capital employed.
The decreasing trend in return on total capital suggests that Ameren Corp. may be facing challenges in optimizing its capital investments to generate adequate returns. Management should closely examine the factors impacting the company's profitability and seek strategies to enhance the utilization of its capital resources to improve future financial performance.
Peer comparison
Dec 31, 2023