American Water Works (AWK)
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 | 1,718,000 | 1,504,000 | 1,273,000 | 1,196,000 | 1,248,000 |
| Long-term debt | US$ in thousands | — | — | — | — | 11,807,000 |
| Total stockholders’ equity | US$ in thousands | 10,332,000 | 9,797,000 | 7,693,000 | 7,298,000 | 6,454,000 |
| Return on total capital | 16.63% | 15.35% | 16.55% | 16.39% | 6.83% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,718,000K ÷ ($—K + $10,332,000K)
= 16.63%
American Water Works' return on total capital has shown a consistent improvement over the years, increasing from 6.83% in December 2020 to 16.63% by December 2024. This upward trend indicates the company's ability to generate higher returns relative to its total capital employed. The significant increase in the return on total capital from 2020 to 2024 suggests a more efficient utilization of capital resources, which could be attributed to improved operational efficiency, better capital allocation decisions, or effective cost management strategies. Overall, the steady rise in return on total capital signifies American Water Works' enhanced profitability and value creation for its stakeholders.
Peer comparison
Dec 31, 2024