Howmet Aerospace Inc (HWM)
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 | 1,193,000 | 835,000 | 583,000 | 538,000 | 892,000 |
| Long-term debt | US$ in thousands | 3,500,000 | 4,162,000 | 4,227,000 | 4,699,000 | 4,906,000 |
| Total stockholders’ equity | US$ in thousands | 4,037,000 | 3,601,000 | 3,508,000 | 3,577,000 | 4,591,000 |
| Return on total capital | 15.83% | 10.76% | 7.54% | 6.50% | 9.39% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,193,000K ÷ ($3,500,000K + $4,037,000K)
= 15.83%
The return on total capital for Howmet Aerospace Inc has exhibited a positive trend over the past five years, indicating an improvement in the company's ability to generate returns from its total invested capital. The ratio has steadily increased from 9.34% in 2020 to 15.83% in 2023, with a slight dip in 2022.
This upward trend suggests that Howmet Aerospace has been more efficient in utilizing its total capital to generate profits and create value for its investors. A higher return on total capital indicates that the company is effectively generating profits relative to the total amount of capital employed in its operations.
Overall, the increasing return on total capital reflects positively on Howmet Aerospace's financial performance and management of capital resources, signaling potential profitability and value creation for its stakeholders.
Peer comparison
Dec 31, 2023