Delta Air Lines Inc (DAL)
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 | 5,521,000 | 3,661,000 | 1,886,000 | -12,469,000 | 6,618,000 |
| Long-term debt | US$ in thousands | 15,985,000 | 19,326,000 | 23,582,000 | 26,531,000 | 8,052,000 |
| Total stockholders’ equity | US$ in thousands | 11,105,000 | 6,582,000 | 3,887,000 | 1,534,000 | 15,358,000 |
| Return on total capital | 20.38% | 14.13% | 6.87% | -44.43% | 28.27% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $5,521,000K ÷ ($15,985,000K + $11,105,000K)
= 20.38%
The return on total capital for Delta Air Lines, Inc. shows variability over the past five years. In 2023, the return on total capital was 20.49%, marking a significant improvement from the previous year. This indicates that Delta Air Lines became more efficient in generating profits relative to its total invested capital. The positive trend from 2022 to 2023 suggests improved operational performance and effective capital allocation strategies.
In contrast, the return on total capital was negative in 2021 and 2020, standing at -9.68% and -26.70% respectively. These negative figures imply that Delta Air Lines was not able to generate sufficient profits to cover the total capital invested in the business during those years. The sharp decline in 2020 may be attributed to the impact of the COVID-19 pandemic on the airline industry, leading to reduced revenues and increased financial challenges.
The return on total capital rebounded to 24.96% in 2019, indicating a strong performance in that year. This suggests that Delta Air Lines was able to efficiently utilize its capital to generate profits, resulting in a favorable return for investors.
In conclusion, the return on total capital for Delta Air Lines fluctuated over the past five years, reflecting the company's financial performance and ability to generate returns on its total capital investment. The positive trend in 2023 indicates improved efficiency and profitability, while the negative returns in 2021 and 2020 highlight the challenging operating environment faced by the airline industry during those years.
Peer comparison
Dec 31, 2023