AeroVironment Inc (AVAV)
Return on total capital
| Apr 30, 2025 | Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | — | 66,754 | -179,009 | -13,703 | 34,983 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 886,507 | 822,745 | 550,970 | 607,969 | 612,093 |
| Return on total capital | 0.00% | 8.11% | -32.49% | -2.25% | 5.72% |
April 30, 2025 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $—K ÷ ($—K + $886,507K)
= 0.00%
The analysis of AeroVironment Inc.'s return on total capital (ROTC) over the specified periods reveals notable fluctuations, reflecting significant changes in the company's efficiency in utilizing its total capital base to generate earnings.
As of April 30, 2021, the company experienced a positive ROTC of 5.72%, indicating a reasonable level of profitability in relation to its total capital. However, this metric deteriorated markedly by April 30, 2022, registering a decline to -2.25%, which suggests that the company was not generating adequate returns relative to its capital employed, potentially due to increased costs, lower earnings, or operational challenges.
The downward trend continued into April 30, 2023, with the ROTC dropping sharply to -32.49%. This significant negative turn indicates that AeroVironment was generating substantial losses relative to its total capital during this period, raising concerns about operational or strategic issues affecting profitability.
Subsequently, the ROTC improved substantially to 8.11% as of April 30, 2024, marking a recovery and signaling enhanced operational performance or strategic adjustments that positively impacted profitability. This increase suggests a turnaround in generating returns on the company's capital base.
By April 30, 2025, the return on total capital was recorded at 0.00%, indicating a breakeven point where earnings precisely offset capital costs. This neutral figure demonstrates stabilization but also points to the potential need for continued improvement to generate consistent positive returns.
Overall, the trend in AeroVironment Inc.'s ROTC over these periods indicates periods of significant volatility, with deep losses followed by recovery. The fluctuations highlight the importance of analyzing underlying drivers, such as operational performance, market conditions, and strategic initiatives, to understand the company's capacity to sustain or improve its profitability relative to total capital employed.
Peer comparison
Apr 30, 2025