Allete Inc (ALE)

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	355,800	336,700	255,900	231,600	233,300	245,100	240,200	233,600	211,400	180,200	191,700	177,900	187,600	210,600	204,000	222,200	243,900	251,100	254,900	252,200
Long-term debt	US$ in thousands	1,679,900	1,686,100	1,685,900	1,755,500	1,648,200	1,653,000	1,595,600	1,669,400	1,763,200	1,649,400	1,664,600	1,652,400	1,593,200	1,608,000	1,381,000	1,399,900	1,400,900	1,404,900	1,505,900	1,525,000
Total stockholders’ equity	US$ in thousands	2,809,600	2,786,600	2,734,100	2,715,500	2,691,900	2,682,600	2,680,400	2,449,300	2,404,300	2,340,000	2,322,600	2,320,700	2,294,600	2,281,000	2,265,700	2,271,100	2,231,900	2,207,800	2,205,000	2,198,700
Return on total capital		7.93%	7.53%	5.79%	5.18%	5.38%	5.65%	5.62%	5.67%	5.07%	4.52%	4.81%	4.48%	4.83%	5.42%	5.59%	6.05%	6.71%	6.95%	6.87%	6.77%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $355,800K ÷ ($1,679,900K + $2,809,600K)
= 7.93%

Return on total capital is a key financial ratio that measures a company's ability to generate profits from the capital invested in the business. Allete, Inc.'s return on total capital has varied over the past eight quarters, ranging from 3.19% to 4.40%.

In the latest quarter, Q4 2023, Allete, Inc. reported a return on total capital of 4.40%, showing an improvement compared to the previous quarter. This indicates that the company is becoming more efficient in utilizing its total capital to generate profits.

Over the past two years, Allete, Inc.'s return on total capital has generally been in the range of 3.31% to 4.40%, with some fluctuations quarter by quarter. It is important for investors and stakeholders to monitor this ratio over time to assess the company's performance in generating returns relative to the capital invested.

Overall, the trend in Allete, Inc.'s return on total capital shows fluctuations, but the recent increase in Q4 2023 is a positive sign of the company's ability to generate profits from its capital base.