Howmet Aerospace Inc (HWM)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,565,000 | 1,193,000 | 995,000 | 825,000 | 552,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 4,554,000 | 4,037,000 | 3,601,000 | 3,508,000 | 3,580,000 |
| Return on total capital | 34.37% | 29.55% | 27.63% | 23.52% | 15.42% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,565,000K ÷ ($—K + $4,554,000K)
= 34.37%
To analyze the return on total capital trend of Howmet Aerospace Inc over the years, we observe a consistent improvement. In December 2020, the return on total capital stood at 15.42%, reflecting the company's efficiency in generating profits using its total capital.
By December 2021, this ratio increased to 23.52%, indicating enhanced profitability and effective utilization of the company's capital resources. Furthermore, in December 2022, the return on total capital rose to 27.63%, showing sustained growth in generating returns for both debt and equity holders.
The trend continued in December 2023, with a return on total capital of 29.55%, underscoring the company's strong operational performance and financial management. Finally, by December 2024, the return on total capital reached 34.37%, highlighting Howmet Aerospace Inc's ability to generate higher returns relative to its total capital investment.
Overall, the increasing trend in return on total capital signifies the company's efficient use of capital and improved profitability, which may indicate positive prospects for investors and stakeholders in Howmet Aerospace Inc.
Peer comparison
Dec 31, 2024