American States Water Company (AWR)

Return on total capital

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	192,507	193,200	190,935	198,028	209,282	200,944	189,486	159,498	129,087	130,549	132,788	140,393	147,604	147,273	145,425	144,570	137,153	131,506	133,460	135,142
Long-term debt	US$ in thousands	640,382	640,247	640,028	575,530	575,555	575,459	576,376	576,431	446,547	446,817	446,940	412,150	412,176	412,093	412,345	440,326	440,348	440,343	280,886	280,971
Total stockholders’ equity	US$ in thousands	920,051	879,466	833,477	800,493	776,109	771,337	755,066	730,848	709,549	705,504	694,225	687,425	685,947	678,935	664,134	649,393	641,673	633,820	619,288	604,583
Return on total capital		12.34%	12.71%	12.96%	14.39%	15.48%	14.92%	14.23%	12.20%	11.17%	11.33%	11.64%	12.77%	13.44%	13.50%	13.51%	13.27%	12.68%	12.24%	14.83%	15.26%

December 31, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $192,507K ÷ ($640,382K + $920,051K)
= 12.34%

American States Water Company's return on total capital has shown some fluctuations over the past few years. The return on total capital ranged from a high of 15.48% in December 2023 to a low of 11.17% in December 2022. Generally, the return on total capital has been in the range of 11% to 15%, indicating a reasonable profitability in utilizing both equity and debt in the company's operations.

It is important to note that a return on total capital above the company's cost of capital is essential for creating value for shareholders. The company's management should continue to monitor and possibly improve the return on total capital to ensure sustainable profitability and long-term financial health.