CMS Energy Corporation (CMS)
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 | 1,677,000 | 1,449,000 | 1,948,000 | 1,375,000 | 1,271,000 |
| Long-term debt | US$ in thousands | 14,508,000 | 13,122,000 | 12,046,000 | 11,744,000 | 11,951,000 |
| Total stockholders’ equity | US$ in thousands | 7,544,000 | 7,015,000 | 6,631,000 | 5,496,000 | 5,018,000 |
| Return on total capital | 7.60% | 7.20% | 10.43% | 7.98% | 7.49% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,677,000K ÷ ($14,508,000K + $7,544,000K)
= 7.60%
CMS Energy Corporation's return on total capital has shown a declining trend over the past five years, decreasing from 6.84% in 2019 to 5.36% in 2023. This indicates that the company's ability to generate profit from its total capital employed has been decreasing over the years. The drop in return on total capital could be a concerning sign for investors as it may suggest inefficiencies in the company's operations or capital allocation strategies. It is crucial for CMS Energy Corporation to closely evaluate and address the factors contributing to this declining trend in order to improve its overall financial performance and shareholder returns.
Peer comparison
Dec 31, 2023