American Axle & Manufacturing (AXL)

Return on total capital

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	177,200	200,600	234,800	237,500	240,800	176,400	144,500	146,600	196,400	302,700	417,600	146,800	-398,200	-912,900	-1,171,800	-854,600	-316,100	-300,100	-59,600	33,200
Long-term debt	US$ in thousands	2,794,700	2,879,800	2,902,400	2,897,300	2,896,800	3,001,000	3,063,700	3,092,900	3,119,100	—	—	—	3,486,900	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	604,900	613,700	644,800	621,700	627,300	486,500	469,200	484,500	457,800	432,800	441,300	401,300	370,500	340,900	196,200	389,800	977,600	1,406,800	1,569,500	1,521,300
Return on total capital		5.21%	5.74%	6.62%	6.75%	6.83%	5.06%	4.09%	4.10%	5.49%	69.94%	94.63%	36.58%	-10.32%	-267.79%	-597.25%	-219.24%	-32.33%	-21.33%	-3.80%	2.18%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (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 shown a slight decline in the most recent quarter, dropping from 5.51% in Q3 2023 to 5.09% in Q4 2023. This downward trend raises some concerns about the company's ability to generate returns on the capital invested in the business. Despite this decline, the return on total capital remains relatively stable over the past year, ranging from 5.09% to 7.72%.

The fluctuation in return on total capital may indicate varying efficiency in utilizing the company's total capital resources to generate profits. It is essential for the company to closely monitor and potentially improve this ratio to ensure sustainable and profitable operations in the long run. A consistent and improving return on total capital is indicative of effective capital allocation and operational management within the company.