Entergy Corporation (ETR)

Return on total capital

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2019 Dec 31, 2018
Earnings before interest and tax (EBIT) US$ in thousands 2,672,410 1,976,420 2,144,560 1,813,830 519,183
Long-term debt US$ in thousands 23,008,800 23,623,500 24,841,600 17,078,600 15,518,300
Total stockholders’ equity US$ in thousands 14,622,600 12,967,000 11,637,300 10,223,700 8,844,300
Return on total capital 7.10% 5.40% 5.88% 6.64% 2.13%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $2,672,410K ÷ ($23,008,800K + $14,622,600K)
= 7.10%

Entergy Corp.'s return on total capital has shown fluctuation over the past five years. In 2023, the return on total capital increased to 6.48% from 4.72% in 2022, indicating an improvement in the company's ability to generate profits from the capital invested in the business. This upward trend suggests that Entergy Corp. has become more efficient in utilizing its total capital to generate returns for its investors.

Comparing the return on total capital of 2023 to the figures from 2021, 2020, and 2019, it is evident that the company's performance in 2023 was higher than in the previous years, with 2021 being the closest at 5.42%. This implies that Entergy Corp. has managed to enhance its capital efficiency in the most recent fiscal year, potentially through better cost management, revenue growth, or operational improvements.

Overall, the increasing trend in return on total capital for Entergy Corp. indicates a positive trajectory in the company's financial performance, showcasing its ability to generate returns for its capital providers. However, it is important to monitor this metric over time to ensure sustained improvement in capital efficiency and profitability.