The AES Corporation (AES)
Return on total capital
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,829,000 | 968,000 | 1,144,000 | 956,000 | 836,000 | 758,000 | 627,000 | 752,000 | 369,000 | 1,743,000 | 842,000 | 884,000 | 1,300,000 | 758,000 | 1,538,000 | 1,637,000 | 1,705,000 | 2,055,000 | 1,967,000 | 2,305,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 2,488,000 | 2,779,000 | 2,492,000 | 2,362,000 | 2,437,000 | 3,409,000 | 2,995,000 | 3,044,000 | 2,798,000 | 3,482,000 | 3,265,000 | 3,377,000 | 2,634,000 | 2,004,000 | 2,462,000 | 2,539,000 | 2,996,000 | 3,140,000 | 3,208,000 | 3,234,000 |
| Return on total capital | 73.51% | 34.83% | 45.91% | 40.47% | 34.30% | 22.24% | 20.93% | 24.70% | 13.19% | 50.06% | 25.79% | 26.18% | 49.35% | 37.82% | 62.47% | 64.47% | 56.91% | 65.45% | 61.32% | 71.27% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $1,829,000K ÷ ($—K + $2,488,000K)
= 73.51%
AES Corp.'s return on total capital has exhibited a downward trend over the past eight quarters, starting at 10.21% in Q1 2022 and gradually decreasing to 7.55% in Q4 2023. This indicates that the company's ability to generate profits from its total capital employed has weakened over this period. The decrease in return on total capital could be a red flag for investors as it suggests that the company may be facing challenges in effectively utilizing its capital to generate returns. Further analysis and investigation into the factors contributing to this trend may be necessary to understand the underlying issues impacting AES Corp.'s profitability.