Allegiant Travel Company (ALGT)

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	312,237	120,664	265,094	-299,352	378,048
Long-term debt	US$ in thousands	1,819,720	1,944,080	1,612,490	1,441,780	1,248,580
Total stockholders’ equity	US$ in thousands	1,328,560	1,220,700	1,223,550	699,363	883,551
Return on total capital		9.92%	3.81%	9.35%	-13.98%	17.73%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $312,237K ÷ ($1,819,720K + $1,328,560K)
= 9.92%

Allegiant Travel's return on total capital has shown significant fluctuations over the past five years. The return on total capital stood at 6.96% in 2023, a notable improvement from the previous year's figure of 3.81% in 2022. This upward trend indicates that the company has been able to generate a higher return relative to the total capital employed in the business.

In 2021, the return on total capital was 2.52%, which, although an improvement from the negative return of -18.38% in 2020, still reflects a comparatively lower efficiency in generating returns relative to the capital invested. The positive trajectory from negative territory in 2020 to positive returns in the following years suggests a turnaround in the company's performance and capital utilization.

The return on total capital was particularly strong in 2019 at 15.79%, indicating that Allegiant Travel was able to efficiently deploy its capital to generate significant returns that year. Overall, the improving trend in return on total capital over the past few years suggests enhanced capital efficiency and potentially more effective utilization of resources within the company.