Advanced Energy Industries Inc (AEIS)
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 | 136,562 | 233,095 | 151,681 | 176,023 | 54,388 |
| Long-term debt | US$ in thousands | 895,679 | 353,262 | 372,733 | 304,546 | 321,527 |
| Total stockholders’ equity | US$ in thousands | 1,144,180 | 1,066,270 | 870,851 | 814,739 | 676,714 |
| Return on total capital | 6.69% | 16.42% | 12.20% | 15.73% | 5.45% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $136,562K ÷ ($895,679K + $1,144,180K)
= 6.69%
The return on total capital for Advanced Energy Industries Inc. has shown variability over the past five years. In 2020, the return on total capital was 16.64%, indicating a strong performance in generating profits relative to the total capital employed. This was followed by a decrease to 12.38% in 2021 before increasing to 16.67% in 2022. However, in 2023, the return on total capital decreased notably to 6.83%.
The declining trend in return on total capital from 2022 to 2023 suggests a potential inefficiency in capital utilization or a decrease in profitability compared to the previous year. It is important for the company to closely monitor and assess the factors contributing to this decline in order to make informed decisions aimed at improving capital efficiency and overall financial performance in the future.
Peer comparison
Dec 31, 2023