Air Lease Corporation (AL)
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 | 1,462,600 | 407,413 | 1,054,030 | 1,121,440 | 1,169,700 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 7,160,040 | 6,646,360 | 7,008,570 | 6,072,340 | 5,623,540 |
| Return on total capital | 20.43% | 6.13% | 15.04% | 18.47% | 20.80% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,462,600K ÷ ($—K + $7,160,040K)
= 20.43%
Return on total capital (ROTC) is a key financial ratio that indicates how effectively Air Lease Corporation is generating profits from its total capital employed. The trend analysis of ROTC for Air Lease Corporation over the past five years shows fluctuations in the company's ability to generate returns on its overall capital structure.
In 2023, ROTC significantly increased to 20.43% compared to the previous year, indicating improved efficiency in utilizing the total capital to generate profits. However, the ROTC was higher in 2019 at 20.80%, suggesting that the company was more effective in generating returns on its total capital back then.
The ROTC dropped to 6.13% in 2022, reflecting a decline in profitability compared to the prior year. Nevertheless, there was a notable recovery in 2021, with ROTC reaching 15.04%, showcasing a stronger performance in utilizing total capital to generate returns.
Overall, the fluctuating trend in ROTC for Air Lease Corporation indicates varying levels of efficiency in capital utilization and profit generation over the past five years. It is crucial for the company to focus on maintaining and improving ROTC to ensure sustainable profitability and value creation for its stakeholders.
Peer comparison
Dec 31, 2023