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