Alaska Air Group Inc (ALK)
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 | 687,000 | 818,000 | 782,000 | -257,000 | -1,753,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 4,372,000 | 4,113,000 | 3,816,000 | 3,801,000 | 3,005,000 |
| Return on total capital | 15.71% | 19.89% | 20.49% | -6.76% | -58.34% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $687,000K ÷ ($—K + $4,372,000K)
= 15.71%
Over the five-year period from December 31, 2020, to December 31, 2024, Alaska Air Group Inc's return on total capital has shown fluctuations. The return on total capital percentage was notably negative in December 31, 2020, at -58.34%, indicating that the company's capital investment was not generating adequate returns at that time. However, there has been a significant improvement in the subsequent years.
By December 31, 2021, the return on total capital had improved to -6.76%, still negative but showing a positive trend. In the following years, the return on total capital continued to increase, reaching 20.49% by December 31, 2022, and sustaining a relatively high level at 19.89% by December 31, 2023. This upward trend suggests that the company's capital investment strategies were becoming more effective, resulting in improved returns for shareholders.
By the end of the five-year period on December 31, 2024, Alaska Air Group Inc's return on total capital stood at 15.71%, reflecting a positive performance compared to the initial negative figures observed in 2020. Overall, the trend indicates a positive trajectory in the company's ability to generate returns on the total capital employed, showcasing improvements in efficiency and profitability over the years.
Peer comparison
Dec 31, 2024