Advanced Energy Industries Inc (AEIS)
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 | 77,482 | 113,694 | 245,227 | 157,253 | 189,189 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,203,170 | 1,144,180 | 1,066,270 | 870,851 | 814,739 |
| Return on total capital | 6.44% | 9.94% | 23.00% | 18.06% | 23.22% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $77,482K ÷ ($—K + $1,203,170K)
= 6.44%
The return on total capital for Advanced Energy Industries Inc has shown significant variability over the past five years.
As of December 31, 2020, the return on total capital was 23.22%, indicating that the company was able to generate a healthy return on the total capital invested in the business. This high return suggests that the company was effectively utilizing its capital to generate profits.
By December 31, 2021, the return on total capital had slightly decreased to 18.06%, but still remained at a respectable level, indicating continued efficiency in capital utilization.
In 2022, the return on total capital increased to 23.00%, showing a strong rebound from the previous year and suggesting improved profitability and capital efficiency.
However, by the end of 2023, the return on total capital dropped significantly to 9.94%, indicating a decline in the company's ability to generate returns on its total capital. This decrease may be a cause for concern as it suggests less effective management of capital resources.
The trend continued in 2024 with a further decrease in the return on total capital to 6.44%, indicating a continuing challenge in generating profits relative to the total capital employed.
Overall, while Advanced Energy Industries Inc has demonstrated periods of strong capital efficiency in the past five years, the declining trend in the return on total capital from 2023 to 2024 warrants closer monitoring to assess the company's ability to effectively utilize its capital and generate sustainable returns in the future.
Peer comparison
Dec 31, 2024