American Axle & Manufacturing (AXL)
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 | 177,200 | 240,800 | 196,400 | -398,200 | -316,100 |
| Long-term debt | US$ in thousands | 2,794,700 | 2,896,800 | 3,119,100 | 3,486,900 | — |
| Total stockholders’ equity | US$ in thousands | 604,900 | 627,300 | 457,800 | 370,500 | 977,600 |
| Return on total capital | 5.21% | 6.83% | 5.49% | -10.32% | -32.33% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $177,200K ÷ ($2,794,700K + $604,900K)
= 5.21%
American Axle & Manufacturing Holdings Inc's return on total capital has exhibited some fluctuations over the past five years. In 2023, the return on total capital decreased to 5.09% from the previous year's level of 7.72%. This dip indicates a decline in the company's ability to generate returns from its total capital in 2023.
Comparing the latest return on total capital with that of 2019, where it was at 9.58%, there has been a significant decrease in the company's performance in this aspect. The 2023 figure of 5.09% is substantially lower than the 2019 figure, suggesting a potential deterioration in the company's efficiency in utilizing its total capital to generate returns.
However, it is notable that in 2021, the return on total capital was at a relatively strong level of 8.22%, showing an improvement from the previous year. Despite the fluctuations in the return on total capital over the years, it is essential for investors and stakeholders to carefully assess the company's ability to effectively deploy its total capital to generate returns and monitor any trends that may indicate changes in its operational efficiency.
Peer comparison
Dec 31, 2023