Consolidated Edison Inc (ED)
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 | 4,029,000 | 3,010,000 | 2,441,000 | 2,210,000 | 2,630,000 |
| Long-term debt | US$ in thousands | 21,989,000 | 22,439,000 | 22,604,000 | 20,382,000 | 18,527,000 |
| Total stockholders’ equity | US$ in thousands | 21,158,000 | 20,687,000 | 20,037,000 | 18,847,000 | 18,022,000 |
| Return on total capital | 9.34% | 6.98% | 5.72% | 5.63% | 7.20% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $4,029,000K ÷ ($21,989,000K + $21,158,000K)
= 9.34%
Consolidated Edison, Inc.'s return on total capital has shown a declining trend over the last five years, from 6.74% in 2019 to 5.11% in 2023. This indicates that the company's ability to generate profits from its total capital has weakened over the period under review. The decreasing trend may be a cause for concern as it suggests that the company's efficiency in utilizing its total capital to generate returns has diminished.
It is essential for investors and stakeholders to closely monitor this trend and investigate the underlying reasons for the decline in return on total capital. Factors such as changes in the company's capital structure, profitability, or efficiency in asset utilization could be contributing to the decreasing trend. Management may need to reassess its strategies and operational performance to improve the return on total capital and enhance overall financial performance in the future.
Peer comparison
Dec 31, 2023