AeroVironment Inc (AVAV)
Return on total capital
| Apr 30, 2025 | Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Jan 31, 2024 | Jan 27, 2024 | Oct 31, 2023 | Oct 28, 2023 | Jul 31, 2023 | Jul 29, 2023 | Apr 30, 2023 | Jan 31, 2023 | Jan 28, 2023 | Oct 31, 2022 | Oct 29, 2022 | Jul 31, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 31, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 26,868 | 31,423 | 47,838 | 56,018 | 59,435 | 80,058 | 90,992 | 103,025 | -87,062 | -110,220 | -130,851 | -170,722 | -21,191 | -26,891 | -34,772 | -7,919 | -7,697 | -18,143 | -21,578 | -31,588 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | 31,292 | — | 73,678 | — | 118,537 | — | — | 155,763 | — | 155,622 | — | 175,481 | — | — |
| Total stockholders’ equity | US$ in thousands | 886,507 | 861,055 | 858,397 | 845,538 | 822,745 | 812,985 | 812,985 | 793,730 | 793,730 | 574,545 | 574,545 | 550,970 | 621,513 | 621,513 | 607,483 | 607,483 | 599,923 | 599,923 | 607,969 | 602,428 |
| Return on total capital | 3.03% | 3.65% | 5.57% | 6.63% | 7.22% | 9.85% | 10.78% | 12.98% | -10.04% | -19.18% | -18.88% | -30.99% | -3.41% | -3.46% | -5.72% | -1.04% | -1.28% | -2.34% | -3.55% | -5.24% |
April 30, 2025 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $26,868K ÷ ($—K + $886,507K)
= 3.03%
The analysis of AeroVironment Inc.'s Return on Total Capital (ROTC) indicates significant fluctuations over the observed period. Initially, the company experienced negative ROTC values, with figures such as -5.24% on January 31, 2022, and periods of continued negative performance through much of 2022 and early 2023, including a notably low point of -30.99% on April 30, 2023. These negative values suggest that during this phase, AeroVironament was effectively not generating sufficient operating income relative to its total capital base, pointing toward periods of unprofitability or inefficient capital utilization.
Throughout late 2022 and into 2023, the negative trend persisted, although some improvement was observed with the ROTC edging toward less negative territory, e.g., -1.04% on October 29, 2022, and -3.41% on January 31, 2023. Despite these improvements, the company still faced periods of negative performance, reflecting ongoing challenges in translating capital deployment into positive returns.
A notable turnaround occurs around the end of 2023 and the beginning of 2024, when the ROTC shifts into positive territory; specifically, it registers at 12.98% on October 31, 2023, and further increases to 10.78% on January 27, 2024, and 9.85% on January 31, 2024. This transition indicates a substantial improvement in the company's ability to generate operating income from its total capital base, moving from losses to meaningful gains.
Subsequently, the ROTC demonstrates a declining but positive trend through mid-2024 and 2025. Values such as 7.22% on April 30, 2024, and 5.57% on October 31, 2024, suggest ongoing positive profitability, albeit at a declining rate. By April 30, 2025, the ROTC remains positive at approximately 3.03%, implying a more stabilized state of capital efficiency, though the margins are narrower compared to the earlier positive period.
Overall, AeroVironment Inc.'s ROTC trajectory reflects a period of substantial losses followed by a significant recovery towards profitability, with subsequent stabilization at positive levels. The recent positive figures indicate an improvement in the company's ability to efficiently utilize its total capital to generate earnings, though the declining trend in 2024 may warrant further investigation into the sustainability of this performance.
Peer comparison
Apr 30, 2025