American Electric Power Co Inc (AEP)
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 | 4,303,600 | 3,556,200 | 3,482,700 | 3,411,300 | 2,987,700 |
| Long-term debt | US$ in thousands | 39,307,800 | 37,652,700 | 34,314,600 | 31,300,700 | 28,986,400 |
| Total stockholders’ equity | US$ in thousands | 26,943,800 | 25,246,700 | 23,893,400 | 22,433,200 | 20,550,900 |
| Return on total capital | 6.50% | 5.65% | 5.98% | 6.35% | 6.03% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $4,303,600K ÷ ($39,307,800K + $26,943,800K)
= 6.50%
American Electric Power Co Inc's return on total capital has shown some fluctuation over the years. It stood at 6.03% as of December 31, 2020, and slightly increased to 6.35% by December 31, 2021. However, there was a dip in the return on total capital to 5.98% as of December 31, 2022, followed by a further decline to 5.65% by December 31, 2023.
The return on total capital then rebounded to 6.50% by December 31, 2024, marking an improvement from the previous year. This fluctuation in the return on total capital indicates some variability in the company's efficiency in generating profits from its total capital employed over the years. It is important for investors and stakeholders to monitor this metric to assess the company's ability to generate returns on the capital invested in its operations.
Peer comparison
Dec 31, 2024