American Water Works (AWK)
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 | 1,504,000 | 1,273,000 | 1,196,000 | 1,248,000 | 1,214,000 |
| Long-term debt | US$ in thousands | — | — | — | 11,807,000 | 9,770,000 |
| Total stockholders’ equity | US$ in thousands | 9,797,000 | 7,693,000 | 7,298,000 | 6,454,000 | 6,121,000 |
| Return on total capital | 15.35% | 16.55% | 16.39% | 6.83% | 7.64% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,504,000K ÷ ($—K + $9,797,000K)
= 15.35%
American Water Works Co. Inc.'s return on total capital has displayed some fluctuation over the past five years. The return on total capital was 6.78% at the end of 2023, a slight increase from 6.34% in 2022 but lower than the 7.17% reported at the end of 2020 and the 7.73% in 2019. The company's return on total capital has generally trended downward over the period analyzed.
This indicates that American Water Works Co. Inc. may be experiencing challenges in optimizing its capital structure and generating sufficient returns on the total capital employed in its operations. Investors and stakeholders may want to delve deeper into the company's financial performance and strategic decisions to understand the factors contributing to this trend and assess the company's future growth prospects and competitiveness in the market.
Peer comparison
Dec 31, 2023