Allegheny Technologies Incorporated (ATI)
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 | 466,400 | 287,300 | 117,600 | -1,302,700 | 366,300 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,373,000 | 1,045,900 | 685,600 | 521,100 | 2,090,100 |
| Return on total capital | 33.97% | 27.47% | 17.15% | -249.99% | 17.53% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $466,400K ÷ ($—K + $1,373,000K)
= 33.97%
From the provided data, ATI Inc's return on total capital has fluctuated over the past five years. In 2023, the return on total capital was 13.31%, which shows a decrease compared to the previous year's figure of 15.37%. This indicates a slight decline in the company's efficiency in generating profits from both its debt and equity capital in 2023.
It is worth noting that in 2021, the return on total capital was relatively low at 4.21%, indicating a less efficient use of the company's capital resources. However, there was a noticeable improvement in 2022 when the return on total capital increased to 15.37%, suggesting a more effective allocation of capital in that year.
Looking back at 2020 and 2019, the return on total capital was 4.10% and 10.40%, respectively. This shows a relatively stable performance in 2020 and a stronger performance in 2019.
Overall, while there have been fluctuations in ATI Inc's return on total capital over the past five years, there is room for improvement in optimizing the company's capital utilization to enhance profitability and efficiency.