The AES Corporation (AES)
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 | 3,223,000 | 1,829,000 | 836,000 | 369,000 | 1,300,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 3,644,000 | 2,488,000 | 2,437,000 | 2,798,000 | 2,634,000 |
| Return on total capital | 88.45% | 73.51% | 34.30% | 13.19% | 49.35% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $3,223,000K ÷ ($—K + $3,644,000K)
= 88.45%
The Return on Total Capital for The AES Corporation has shown fluctuations over the years analyzed. As of December 31, 2020, the return was 49.35%, indicating a strong performance in utilizing total capital to generate profits. However, by the end of 2021, the return decreased to 13.19%, suggesting a potential decline in efficiency in utilizing total capital.
The return on total capital improved significantly by December 31, 2022, reaching 34.30%, indicating a better utilization of capital resources compared to the previous year. Subsequently, by the end of 2023, the return surged to 73.51%, reflecting a substantial increase in the company's ability to generate profits relative to its total capital.
The most recent data point, as of December 31, 2024, shows a return on total capital of 88.45%, signifying a notable improvement and further enhancement in the efficiency of capital utilization, potentially resulting in enhanced shareholder value and overall financial performance for The AES Corporation. Overall, the trend in the return on total capital for The AES Corporation showcases some fluctuations, but generally demonstrates the company's ability to generate profits from the capital invested in its operations.